Advantage Insurance Company Limited · DRN-6121426

The complaint Mr P complains about how Advantage Insurance Company Limited (“Advantage”) valued his car following a claim he made on his car insurance policy. What happened Mr P was involved in a road traffic accident so he reported the matter to his insurer. Advantage accepted the claim and deemed Mr P’s car a write off. So it made a settlement offer of £4,068 based on the market value of the car at the time of the accident. Mr P says Advantage have undervalued his vehicle and hasn’t taken into account its specification and recent maintenance work. He says his car was in excellent condition and had a full service history. Mr P had also replaced the timing belt, water pump, and new brake pads but these weren’t taken into account. Mr P purchased the car in July 2025 for £5,500. Advantage’s settlement offer for Mr P’s car at £4,068 so he would receive £3,678.80 after the excess was deducted. Mr P says he provided Advantage with adverts for comparable cars that were around £4,995 and £5,995. Mr P says because Advantage undervalued his car he hasn’t been able to replace it with a like for like vehicle. Mr P wants Advantage to increase its offer to £5,800 since he says this reflects its true value. So he complained to Advantage. Advantage says when a car is written off it pays the market value of the car at the time of the incident – it doesn’t make payment for a like-for-like replacement. Advantage said it uses retail guides to value vehicles – in this case the guides valued Mr P’s car at £3,930 and £4,095 which gives an average of £4,012. Advantage said its settlement offer was higher than the average of the guides and so it didn’t increase it. Mr P remained dissatisfied so he referred his complaint to this Service. When Mr P referred the complaint to this Service Advantage increased its settlement offer to £4,302 in line with the guide valuation, plus 8% simple interest for the increased amount. Our Investigator thought the increased offer was fair. But Mr P declined it. So the Investigator considered the evidence and concluded that Advantage’s settlement offer was fair and in line with the policy terms. Mr P didn’t agree and said Advantage’s comparator vehicles were not similar to his since his car was a manual petrol car and not an automatic diesel. Since a resolution couldn’t be reached, the complaint has come to me to decide. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint.

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I should explain that I won’t be repeating the entirety of the complaint history here in my decision, or commenting on every point raised. Instead, I’ve focused on what I consider to be the key points that I need to think about in order to reach a fair and reasonable conclusion. This reflects the informal nature of this Service, and our key function; to resolve disputes quickly, and with minimum formality. However I want to assure both parties I’ve read and considered everything provided. The role of this Service is not to work out exactly what the value of an individual car is. We look at whether the insurer has applied the policy terms correctly and valued the car fairly. Mr P’s policy covers damage to his car, “up to its market value”. In section 1 of the terms and conditions the policy confirms, “If your car is damaged or lost because of an accident…your insurer will do one of the following: pay the market value of your car immediately before the loss”. The market value is defined as, “the cost of replacing your car in the United Kingdom at the time the loss or damage occurred with one of the same make, model, age, and condition. This may not necessarily be the value you declared when the insurance was taken out.” Advantage valued Mr P’s car at £4,302. It said its initial valuation was based on an average of two of the available guides. Advantage then reconsidered its position and increased the settlement offer to £4,302 which is the highest valuation from the guides it used. Mr P doesn’t think this offer is fair because he says he is unable to buy a similar car for the settlement offer. It is standard practice for the industry to use valuation guides to work out the market value of a car. And it’s not unreasonable that it does so, since the guides are generally based on extensive nationwide research of selling prices. But I’ve thought about whether Advantage has used the guides in a fair way in this case. I can see that our check of these guides showed lower valuations to that found by Advantage; between £3,939 and £3,975. One of the guides was unable to provide a valuation due to the age of the car. It’s for that reason I am satisfied the valuation used by Advantage is reasonable. This Service considers it good industry practice for an insurer to pay the highest of the valuation guides, unless it can provide evidence to support that’s not a fair reflection of the cars value. Advantage’s guides gave valuations of £4,095, £3,930, and £4,302. Advantage’s settlement offer was £4,302 which is the highest return of the guides. Since Advantage’s offer is based on the highest of the guides I’m satisfied it has acted fairly here. The condition of the vehicle Mr P has provided evidence of the work he had done to his car prior to the accident, including replacing the timing belt, water pump, and new brake pads. I think the money spent here is on maintenance generally keeping the vehicle in retail condition, rather than increasing its value. If money is not spent on maintaining the vehicle, it may be valued at less than the guide price. So while its clear Mr P’s car was in good condition I think that’s reflected in the valuations. Adverts Since Advantage are paying the highest of the guides the adverts are less relevant when considering settlement offers for cars that have been written off. I would also say that adverts are less persuasive than the guides since they are often slightly inflated to give room

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for negotiation. Both Mr P and Advantage provided adverts to support their respective positions. Looking at these adverts I can see that Advantage’s adverts range from £2,990 to £4,650. The vehicles are largely similar to Mr P’s vehicle but not a match. The vehicles are within 10,000 miles of the mileage of Mr P’s car and are within a year of the registration date of Mr P’s vehicle. The adverts provided by Mr P range from £4,995 to £5,995 but those cars have significantly less mileage than Mr P’s and are either a year newer or three years older than Mr P’s car. So I’m not persuaded the adverts provided support Mr P’s argument that Advantage should increase its settlement offer. I’m persuaded that Advantage has shown that Mr P can replace his car with the settlement offer it has made. While there are plenty of cars on sale for more than the settlement offer, there are also plenty on sale for less than it. I appreciate Mr P’s concerns with the amount he was offered and he thinks if falls short of allowing him to buy a like for like car in a similar condition. But I haven’t seen any evidence that’s the case. And I understand this situation is frustrating considering Mr P only purchased his vehicle a couple of months before the accident, but I can’t say the offer Advantage made is unreasonable and so I’m not directing it to pay anything more than it has offered. Putting things right Advantage Insurance Company Limited has; • Agreed to increase the settlement offer (before excess deductions) to £4,302 My final decision For the reasons set out above I uphold this complaint but don’t require Advantage Insurance Company Limited to take any further action in respect of the complaint if it has done what is set out in the section above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr P to accept or reject my decision before 20 April 2026. Kiran Clair Ombudsman

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