Why is my car’s IDV drastically lesser than resale value?

My Fortuner has run less than 10k km in 4 years and most of those have been on highways. Am I wrong in assuming that I will get around 30-35L if I sell it now? If so, then it is more than 2x the IDV.

BHPian hajaar recently shared this with other enthusiasts.

IDV typically trails resale of a car.

But I think I am in a unique position now where the resale value of my Fortuner (2019) might be significantly more than the IDV in the insurance.

My Fortuner has run less than 10k km in 4 years and most of those have been on highways. Am I wrong in assuming that I will get around 30-35L if I sell it now? If so, then it is more than 2x the IDV.

What should I do in that case? Does it make more sense to sell it or keep it until the IDV reaches a value that is more commensurate with the resale one?

I have no issues with the vehicle and am perfectly happy with it.

Here’s what BHPian Reinhard had to say on the matter:

First of all, if you are fine to keep the car longer & it has no issues either – why are you looking to sell it? Unless there is a specific reason or need, selling a car too early in its life always has a significant depreciation hit and its quite a lot of money lost.

As for the resale value – IDV may or may not be used as a marker for the resale value of a car, especially in the recent times where used car prices are out of the roof & rarely have any close proximity with the IDV. Its a subjective matter and depends a lot on the car in question. You should check what are the offers that you are getting / get the car evaluated from Spinny/Cars24 etc – to get an idea of what you can get for it if sold. IDV doesn’t exactly matter for getting an estimate. If you know your car is worth X Lakhs, and people are ready to pay you that much, why will the IDV matter

Here’s what BHPian androdev had to say on the matter:

IDV is purely based on a fixed depreciation table. Market value is totally driven by the demand. It’s not uncommon to have huge disparity between IDV and market value for certain cars.

What is your concern about lower IDV than market value? Are you worried that in case of a total loss insurance claim, you will get much lower settlement (IDV) than market value? That risk exists but it’s no reason to sell a car that you are happy with.

Here’s what BHPian anjanc_2007 had to say on the matter:

Taking the Insured Declared Value (IDV) for valuation of a car is not a good IDEa. The IDV has several constraints and is the same for cars both in ramshackle and in excellent conditions of the same model year provided their makes, models and variants are one and the same. IDV is a mathematical AI unleashed by insurers much before AI became a hot topic.

Selling or not selling your Fortuner is a personal decision, but depending on its IDV to influence your decision making in this regard is totally uncalled for.

Here’s what BHPian Gupts007 had to say on the matter:

IDV and the real value of the car are from different planets. Just to give you an example, a friend of mine owns a 4-5 year old GLC which he bought for like 50 lacs new. The IDV of that vehicle was around 23 lacs a few months ago and he got an offer for 35 lacs against his demand of 38 lacs. Sadly he met with a minor accident recently. The estimated bill conservatively came around 17 lacs and the insurance offered to just write off the vehicle. Ofcourse he is not happy with it because the IDV is way too less than the real value of the car.

The IDV depends on what the new price was when you bought it as that is the anchor point. The cost of new vehicles for the same model has gone up 50-60% now in the last 5-6 years leading to much higher resale values compared to IDV.

This disparity is a headache for people who meet with an accident and their vehicles are written off.

Read BHPian comments for more insights and information.

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