Car Depreciation: IDV vs Real Resale Value
Ask an insurer and a used-car dealer what your car is "worth" and you'll get two different numbers. One follows a fixed depreciation table; the other follows the market. Knowing both saves you money.
The insurance depreciation schedule (IDV)
Your Insured Declared Value (IDV) - the amount your comprehensive policy pays out on a total loss or theft claim - depreciates on a standard age-based schedule that insurers in India commonly follow:
| Vehicle Age | Typical IDV Depreciation |
|---|---|
| Up to 6 months | 5% |
| 6 months - 1 year | 15% |
| 1 - 2 years | 20% |
| 2 - 3 years | 30% |
| 3 - 4 years | 40% |
| 4 - 5 years | 50% |
Schedules can vary slightly by insurer - confirm the exact table on your policy document before relying on it.
This schedule decides your premium and your claim payout. It is not a market valuation - it's a formula.
Real-world resale value moves differently
What a dealer or a private buyer will actually pay tracks demand, condition, mileage, and brand - not the IDV table. In practice, most cars in India lose roughly 15-20% of their on-road price in year one and 45-55% by year five, similar in shape to the IDV curve but not identical to it, and it varies far more by model.
- Brand and reliability reputation - Maruti Suzuki, Hyundai, and Toyota models are consistently easier to resell at a fair price thanks to strong demand and parts availability.
- Fuel type - diesel resale has softened in many cities as stricter emissions/age rules (e.g. NGT-linked diesel restrictions in some metros) shorten a diesel car's useful life there.
- Odometer reading - low-mileage cars command a real premium over the "average" curve.
- Service history - a documented service record from an authorized center is worth real money to the next buyer.
How to lose less money
- Buy 2-3 years old if resale matters to you. Let the first owner absorb the steepest part of the curve.
- Choose a high-demand brand and variant. Popular trims resell faster and closer to fair value.
- Keep the odometer reasonable. Every extra 10,000 km over the ~12,000-15,000 km/year average costs you at resale time.
- Service on schedule, and keep the invoices. A clean history shortens negotiation and raises the offer.
Your IDV tells you what the insurer will pay if the car is written off. It doesn't tell you what a buyer will pay if you sell it - plan for both separately.
Run the numbers
Car Depreciation Calculator
