Relation between Insured Declared Value and used car price

Selling a car has always been a pain. The number of points to ponder over or documents to carry is mind-boggling. When it comes to selling a used car, there are a number of terms that you keep hearing. Insured Declared Value is one of them. Whether there is really a relation between IDV and the price of a car is a hot topic of discussion. Let’s try to decode the same in this article.

Let’s understand depreciation a tad bit

: The value of your car depreciates with time. The moment your car is out on the road, the condition of the car starts worsening. With age and increase in mileage the value of your car is bound to plummet. This is depreciation, which is beyond anyone’s control. Though, there are practices like cleaning of interior and exterior car parts and regular servicing that helps in maintaining the car’s value. In case, you collide with another vehicle and incur heavy repair charges, the resale value of your car automatically decreases. However, there is a standard rate of Car Depreciation fixed by the Indian Motor Tariff.

Insured Declared Value (IDV) =

(Manufacturers listing price – Depreciation) + (Accessories not included in the listed price – Depreciation)

IDV is highest when the vehicle is brand new. The cost includes:

Basic Cost + Local Taxes + Duties/Cess. It does not include the Registration Cost. The older your car, lesser is the IDV and, lesser the resale value of the car. The highest sum of money an insurer will pay is decided after considering the IDV of the car.

Major factors taken into account while calculating IDV:

• Current selling price of the brand
• Model of your car
• Major accidents your car has been a part of

The price at which you had originally bought the car is not taken into account.

Details needed to calculate Insured Declared Value:

• Car registration Details
• City where the car is registered
• Date on which the first purchase was done
• Current registration type
• Manufacturer, make, model of the car
• Cubic capacity
• Ex-showroom price

IDV Calculation Table (Taking Maruti Swift VXi as an example)

Age of the vehicle	Depreciation Rate for Calculating IDV	Example: Maruti Swift VXi Listed Price	IDV Calculation for Maruti Swift VXi
Brand New Vehicle (just before purchase)	5%*	e.g.  5,50,000	@ 95% =  5,22,500
up to 6 months	5%	e.g.  5,60,000	@ 95% =  5,32,000
6 months – 1 year	15%	e.g.  5,60,000	@ 85% =  4,76,000
1 year – 2 years	20%	e.g.  5,75,000	@ 80% =  4,60,000
2 years – 3 years	30%	e.g.  6,00,000	@ 70% =  4,20,000
3 years – 4 years	40%	e.g.  5,25,000	@ 60% =  3,15,000
4 years – 5 years	50%	e.g.  5,00,000	@ 50% =  2,50,000
more than 5 years (model is obsolete)	decided mutually between owner and insurer	Model discontinued	IDV decided mutually between owner and insurer within a range

Credits: mintwise.com

IDV in context of Resale Value of used car:

1. While renewing your car’s insurance, consider checking the IDV you will get for the premium you are about to pay. Higher the IDV per rupee of premium, you are to get a better value for your used car.
2. Be careful while opting for discounts. They are generally offered by a dealer after reducing the IDV or other standard policy benefits or misquoting facts.
3. The IDV you choose to opt for should be closest to the current value of your car, in the market. A higher IDV means you might just miss out on a good deal while selling your car.

You will come to terms with the IDV when you will be thinking of selling your second hand car. IDV is one of those factors which help in estimating the resale value of your car.

Want to calculate the most accurate resale value of your car?

If you are not a expert in buying and selling of cars, contacting professionals is advisable. CARS24, a pioneer in the domain of selling of used cars, is on a mission to streamline the unorganized car selling market in India. If you want to calculate the worth of your car, you can touch base with CARS24. You only need to book and appointment and visit any of the nearest branches to get your car evaluated. Once, the inspection is done you will be offered the best price in the market. Once, you agree on the price and CARS24 buys your car, you will get the money transferred then and there. There is absolutely no trouble that you will need to face. To book an appointment, visit: 

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To read more about used call selling, visit: 

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