When it comes to buying or selling a used car, several factors come into play and here, vehicle insurance plays an important role. Apart from basics such as the car’s model, mileage, and overall condition, the car’s insurance history is a significant indicator of its value. These give confidence to prospective buyers.
IDV is the maximum amount payable in case of total loss or theft. It represents the current market value of the car, as proposed by the insurer. It decreases over time, especially after three to five years, due to depreciation. A higher IDV suggests the car is well-maintained and in good condition, boosting its resale value.
Vehicle depreciation has a major impact on resale value. Generally, a car's worth diminishes as it ages, losing about 50 per cent of its value over four to five years. Nonetheless, a well-maintained car in good condition with low mileage and minimal claims can still command a good resale price.
A car with a clean claims history influences the resale value positively. Buyers, in this case, feel more confident in the vehicle if it has few or no significant claims, suggesting lower future maintenance. Conversely, multiple major claims diminish the car's attractiveness and resale value.
When one is selling the vehicle, it’s important to transfer the insurance policy to the new owner. This transfer should include the No Claim Bonus (NCB), which reflects the seller's claims history. Properly managing the insurance transfer can preserve the car's value and positively affect its resale price.
Compiled by Syed Muskan
