Does Your Car's Insured Value Matter When Selling It?

India has a thriving used car market, where several factors impact a vehicle’s resale value. One key factor among all is the IDV / Insured Declared Value. Though primarily used to determine insurance premiums and claim amounts, IDV also significantly affects the resale price of a car. Understanding this link can help you choose the right policy and maximise returns when selling. 

In this blog, we will explore how IDV influences your car’s selling price and why it matters when planning a resale.

IDV is the maximum amount your insurance provider will reimburse you in case of total damage to your car. In case your car is completely damaged or stolen, your insurer will provide you with the market value of your car prior to depreciation, after deducting the depreciation. 

The current market value of a car is determined by various factors such as its make, model, age, variant and more. Hence, IDV acts as the certified current market value of a car. You can use IDV calculator to analyse the right IDV. Remember, your IDV is the total sum insured on your car's insurance policy.

Your car’s insured value or IDV does not directly determine its resale price, but it can subtly influence the perception of buyers. The IDV is the maximum amount your insurer would pay in case of theft or total loss.

When selling your car, the actual market value is what matters most. This depends on factors such as the car’s make and model, mileage, condition, service history, accident record, and current market demand. A well-maintained car with low mileage and clean records usually fetches a higher price, regardless of its IDV.

That said, a very low IDV might hint at issues like poor maintenance or previous damage, potentially raising concerns for a buyer. On the other hand, a reasonably high IDV may suggest the car is in good shape, possibly boosting buyer confidence.

Ultimately, buyers focus more on the car’s actual condition and value in the used-car market than on the insured amount. So, while the IDV does not set the selling price, it can play a minor supporting role. 

For sellers, it is best to focus on showcasing the vehicle’s condition, keeping documentation in order, and researching the current market to set a fair and competitive price.

Your car's IDV is related to many things, including selling your car, such as documentation and proof of insurance claims. Here is a list of factors influencing a car's insured declared value which in turn also affects car insurance premium:

It is important to acknowledge your car’s IDV / Insured Declared Value before negotiating with buyers to sell it off. Here is how you can calculate it:

IDV = (manufacturer’s selling price - Depreciation) + (Cost of Accessories - Depreciation)

IDV = (manufacturer’s selling price - Depreciation)

You can use a car insurance value calculator online to know the exact IDV / Insured Declared Value of your car. You can easily find an online calculator on the web and enter a few required details to find out your computerised IDV value. 

When selling your car, knowing its IDV can help you know it's true value and get the maximum value out of the deal. Having your documents and insurance papers duly updated also leverages trust which is very rare in the second hand car market.