Coverfox.com
  • Retail Insurance
    • Car
      • Car Insurance
      • Companies
      • Third party car insurance
      • Comprehensive car insurance
      • Car insurance calculator
      • New car insurance
      • Zero Dep Car Insurance
      • Buy Car Insurance
      • Compare Car Insurance
      • Car Insurance Articles
      • Cashless Garages
    • Bike
      • Two Wheeler Insurance
      • Two Wheeler Insurance Companies
      • Two Wheeler Insurance Claim
      • Two Wheeler premium Calculator
      • Third party Bike insurance
      • Multiyear Bike Insurance
      • Bike Insurance Articles
    • Health
      • Health Insurance
      • Companies
      • Mediclaim Policy
      • Individual Health Insurance plans
      • Critical illness insurance
      • Senior citizen health insurance
      • Arogya sanjeevani policy
      • Health Insurance Articles
      • Network Hospitals
    • Term
      • Term Insurance
      • Companies
      • Life insurance
      • Life Insurance calculator
      • Term Insurance calculator
      • Life Insurance Plans
      • 1 crore term insurance
      • Compare Term Insurance
      • Buy Term Insurance
      • Term Insurance Renewals
      • Term Insurance Articles
      • Life Insurance Articles
  • Micro Insurance
    • Coverfox Sehat Suraksha
    • Coverfox Sankalp Suraksha
  • Business Insurance
    • Fire
    • Workmen Compensation
    • Contractor's All Risk Insurance
    • Marine Transit Insurance (Import)
    • Marine Transit Insurance (Export)
    • Marine Transit Insurance (Inland)
    • Marine Open Insurance
    • Explore Other SME products
  • About Coverfox
    • About us
    • Insurance Blog
  • Claims
  • Contact us
  • Login
Buying Car Insurance from Coverfox is simple
Upto 85% discount. Get policy in 5 minutes.
Already bought from Coverfox?
Renew here in 2 steps
3 Day Express Claim Service FREE
We pick your car, get it repaired & drop it back.
3000+ Cashless Garages
Never worry about payments
4.7/5
star star star star half star
4.6/5
star star star star half star
Highest rated insurance website
icon Car Insurance icon Used Car Valuation

Used Car Valuation

Buying a car as a valuable asset is a dream for many – but it is a depreciating asset. Meaning? If you are going to resell your car, it will not fetch the same amount you purchased it for (with a few exceptions like vintage cars). In case if you wish to sell your car, you need to reevaluate the pricing of your car, based on various factors like age, condition, customisations, etc. In FY 2025, about 5.6 million used cars were sold in India. In this article, you will understand how to calculate and evaluate a used car for resale.

Used Car Valuation

What is Used Car Valuation?

Used Car Valuation is the process of determining the current market value of a pre-owned vehicle based on factors like its make, model, variant, age, mileage, condition, fuel type, accident history, number of previous owners, and prevailing market demand. This valuation helps both buyers and sellers arrive at a fair price during a resale transaction. As the car leaves the dealership, it loses its monetary value in depreciation. In India, used car valuation is often done using online car valuation tools, dealer assessments, or professional evaluators. It is especially important because prices for second-hand cars vary widely depending on region, supply and demand, and the specific condition of the vehicle. Accurate valuation protects buyers from overpaying and ensures sellers get a fair return.

Key Factors That Affect Used Car Valuation

When it comes to determining the fair price of a second-hand car, several key factors influence its valuation. Here are the most important ones:

  • Age of the Car

  • Newer cars generally have a higher resale value, while older cars depreciate faster, depending on the condition of the car.

  • Mileage Covered

  • Lower mileage indicates less wear and tear, leading to better valuation compared to high-mileage vehicles.

  • Fuel Type

  • Diesel and CNG cars may have different resale values compared to petrol cars, depending on demand and running costs.

  • Ownership History and Year of Purchase

  • Cars with fewer owners are valued higher than those that have changed hands multiple times. Similarly, every year the car loses its monetary value as depreciation, and it is calculated based on a year (For example, a car bought in December 2024 will depreciate its value by a year in January of 2025 even though it is just been a month).

  • Market Demand and Location

  • Popular models with high demand in the second-hand market tend to sell at better prices, although it may depend on the location of the car as well (city or rural, states, countries, etc).

How to Check the Price of a Used Car Online?

You can check the price of a used car online through digital valuation tools available on popular car portals and insurance websites. These tools calculate the fair market value of a vehicle based on the above-mentioned factors. Some platforms also consider the car’s overall condition, accident history, and ownership details to refine the estimate. By entering these details, you receive an instant price range that reflects the current resale market. This process is quick, free, and equips both buyers and sellers with the confidence to negotiate better by knowing the realistic worth of a second-hand car.

How Depreciation Affects Used Car Valuation

Depreciation is the natural decline in a car’s value over time and is one of the most important factors in used car valuation. Every year, a vehicle loses a certain percentage of its original price, depending on age, brand reputation, usage, and condition. Here’s how depreciation affects valuation:

1. First-Year Drop

A brand-new car typically loses 20–30% of its value in the first year after purchase.

2. 3–5 Year Range

Within 3 to 5 years, most cars lose around 40–50% of their original value, making this period the steepest depreciation phase.

3. After 5 Years

The depreciation curve slows down, and the annual drop becomes smaller, usually around 10% or less per year.

4. Factors that Slow Depreciation

Well-maintained cars, popular models, and brands with strong resale demand tend to hold their value better.

Example:

If a car is bought for ₹10 lakh, its value may fall to ₹7–8 lakh after the first year. By the 5th year, it might be worth only ₹5–6 lakh, depending on mileage and condition. This demonstrates how depreciation impacts resale price and why it’s important for buyers and sellers to account for it in negotiations

*Note: These numbers are just speculative estimates, real value and percentages may differ as per model, condition, demand and various other factors.

Tips to Maximise Your Car's Value

Maximising your car’s value at the time of resale requires proper execution with calculated steps:

  • Keep Up with Regular Maintenance

  • Follow the manufacturer’s service schedule, use authorised service centres, and keep records of all servicing and repairs to show buyers your car is well-maintained.

  • Maintain the Exterior and Interior

  • Fix dents, scratches, and paint issues promptly, and keep the interiors clean and odour-free, as first impressions significantly impact resale value.

  • Drive Responsibly

  • Avoid rash driving and overloading the car, as smoother usage leads to fewer mechanical issues and better long-term performance.

  • Keep Mileage in Check

  • High mileage reduces valuation, so use the car judiciously and avoid unnecessary long trips if you are planning to sell your car.

  • Ensure All Documents Are in Order

  • Keep your registration certificate (RC), insurance papers, PUC certificate, and service records updated, as missing documents can lower the car’s value.

  • Sell at the Right Time

  • Selling before the car crosses major depreciation milestones (like the 5th or 7th year) helps secure a better price.

Insurance and Implications of Used Car Valuation

Used car valuation directly impacts your car insurance premium and claim settlement. Insurers calculate the Insured Declared Value (IDV), which is the current market value of the car after depreciation. A lower IDV reduces your premium but also lowers the maximum claim amount. For instance, a car bought for ₹7 lakh may have an IDV of ₹4.5 lakh after three years, which is what the insurer will pay in case of total loss. In short, your car’s valuation decides how much you pay for insurance and how much you can claim.

Explore Car Insurance
Here are some quick links to find out more about car insurance in detail
Car Insurance Calculator
Comprehensive Car Insurance
Third-Party Car Insurance
Buy Car Insurance
Compare Car Insurance
New Car Insurance
Zero Dep Car Insurance
Comprehensive Car Insurance
Third-Party Car Insurance
Buy Car Insurance
View More +

Frequently Asked Questions

  • Q. What is the best way to find vehicle value?

    • You can use online car valuation tools or consult dealers to get an accurate estimate of your vehicle’s market price.

  • Q. Can modifications increase my car's value?

    • It depends on the buyer – while most modifications do not fetch higher prices, as people prefer factory-set cars, certain modifications like quality speakers or woofer systems definitely add as an attractive feature.

  • Q. How does the condition of the car affect the price?

    • A well-maintained car with no major damages or repairs commands a higher resale value.

  • Q. What is the resale value of a car?

    • It is the price a car can fetch in the used car market based on age, mileage, condition, and demand.

  • Q. How does car valuation affect my insurance premium?

    • Insurance premium is based on the Insured Declared Value (IDV), which reflects your car’s current market value.

  • Q. Will my insurance cover the full value if my car is totalled?

    • No, the insurer pays the IDV, not the original purchase price.

  • Q. How do insurers determine the value of my car?

    • They calculate it using depreciation rates, car age, and current market trends.

  • Q. Does mileage impact my car insurance rates?

    • Yes, high mileage reduces the car’s valuation, indirectly lowering your IDV and insurance premium.

  • Q. How frequently used car prices get updated?

    • Used car prices are updated regularly based on market trends, usually every few months.

Show more

Best Car Insurance Companies in India 2025

HDFC ERGO Car Insurance
HDFC ERGO Car Insurance
Reliance Car Insurance
Reliance Car Insurance
Oriental Car Insurance
Oriental Car Insurance
Acko Car Insurance
Acko Car Insurance
Kotak Car Insurance
Kotak Car Insurance
Royal Sundaram Car Insurance
Royal Sundaram Insurance
National Car Insurance
National Car Insurance
SBI Car Insurance
SBI Car Insurance
Liberty Car Insurance
Liberty Car Insurance
Magma HDI Car Insurance
Magma HDI Car Insurance
Shriram Car Insurance
Shriram Car Insurance
Universal Sompo Car Insurance
Universal Sompo Insurance
ICICI Lombard Car Insurance
ICICI Lombard Car Insurance
Edelweiss Car Insurance
Edelweiss Car Insurance
United India Car Insurance
United India Car Insurance
Bajaj Allianz Car Insurance
Bajaj Allianz Car Insurance
IFFCO TOKIO Car Insurance
IFFCO TOKIO Car Insurance
New India Assurance Car Insurance
New India Assurance Insurance
Digit Car Insurance
Digit Car Insurance
Tata Aig Car Insurance
Tata Aig Car Insurance
Cholamandalam MS Car Insurance
Cholamandalam MS Insurance
Future Generali Insurance
Future Generali Insurance
Close
×

Get Lowest Rates for car Insurance

With Upto 85% Discount

  • Secure
  • Licensed By
  • Payment Options
  • Car Insurance
  • Bike Insurance
  • Motor Insurance
  • Car Insurance Premium Calculator
  • Family Health Insurance
  • Senior Citizens Insurance
  • Group Insurance
  • Corona Rakshak Policy
  • Corona Kavach Policy
  • Super Topup Plan
  • Term Insurance
  • ULIP
  • e-Term Plan
  • 1 Cr Term Insurance
  • कार इन्शुरन्स
  • टू व्हीलर इंश्योरेंस
  • टर्म इंश्योरेंस
  • हेल्थ इंश्योरेंस
  • मेडिक्लेम पॉलिसी
  • Learn About Insurance
  • Network Hospitals
  • Cashless Garages
  • Get Android App
  • Get iOS App
  • Learn
  • About Us
  • Contact Us
  • Careers
  • Sitemap
  • FAQs
Connect with us
Become a Partner
Become a Coverdrive POS Agent

Coverfox Insurance Broking Pvt. Ltd. : C Wing, 6111-6118, 6th Floor, Oberoi Garden Estate, Chandivali Farm Road, Chandivali, Andheri (East), Mumbai - 400072

Licence No. 478 , IRDA Direct Broker Code: IRDA/ DB 556/ 13 , Valid till: 26/12/2025, CIN: U66000MH2013PTC243810

  • Shipping & Delivery Policy
  • Privacy Policy
  • Legal Policies
  • Cancellation & Refund
  • Terms & Conditions
Copyright © 2025 Coverfox.com. All Rights Reserved