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IDV for Cars and Bikes Older Than 5 Years: How It Is Decided

By  Updated  3 min read
IDV for Cars and Bikes Older Than 5 Years: How It Is Decided
In this guide

Key takeaways

  • For vehicles older than five years, IDV is mutually agreed between you and the insurer.
  • It is normally guided by the market value of similar vehicles — model, variant, condition, mileage and demand.
  • Ask how the figure was arrived at and bring evidence if you think it is too low.
  • Our calculators show an indicative estimate (+5% depreciation per extra year), clearly labelled.

Up to five years, IDV is formula-driven. After that, the standard policy wording simply says the IDV of vehicles beyond five years, and of obsolete models, is determined on the basis of an understanding between the insurer and the insured. In practice, that means your IDV is a negotiation anchored on market value.

How insurers usually approach it

  • System valuation. Many insurers use pricing data for used vehicles of the same make, model, variant and year to propose an IDV.
  • Continued depreciation. Some apply additional yearly depreciation on top of the 50% reached at five years.
  • Inspection or survey. For a lapsed policy, a high-value vehicle or one with modifications, the insurer may inspect it before agreeing a value.

Whatever the method, once the policy is issued the agreed IDV is treated as the vehicle’s value for that policy year for total-loss and theft claims.

What pushes the value up or down

Tends to raise IDV Tends to lower IDV
Popular model with strong resale demand Discontinued model or limited service network
Good condition, full service history Accident history, rust, poor upkeep
Lower mileage for the age Very high mileage
Declared accessories in good condition Undeclared modifications

An indicative starting point

To give owners something to compare against, our calculators continue the schedule at 5 percentage points per extra year: 55% depreciation at 5–6 years, 60% at 6–7 years and so on, capped at 85%. For an ₹8,00,000 car that is about ₹3,60,000 at 5–6 years and ₹3,20,000 at 6–7 years. This is not a regulatory rate — it is a reference you can test against the insurer’s figure and local resale prices.

How to check and negotiate

  1. Look up asking prices for the same model, variant and year in your city on used-vehicle marketplaces and dealer listings. Sale prices are usually a little below asking prices.
  2. Compare with the IDV proposed by two or three insurers.
  3. If one insurer is far lower than the others and the market, ask it to revise the figure. Mention service records and declared accessories.
  4. Do not inflate the IDV above market value — it raises premium and the insurer is unlikely to accept it.

Is comprehensive cover still worth it?

For an older vehicle, the own-damage premium is smaller because the IDV is smaller. If the vehicle is still your main transport, cover against theft, fire, flood and accidental damage usually remains worthwhile. Some add-ons, such as zero-dep and Return-to-Invoice, are often not available for older vehicles, so the base policy matters more.

See the indicative IDV for your older car or bike.

Depreciation Calculator

FAQs

Is 50% the maximum depreciation for IDV?

50% is the last rate in the schedule (4–5 years). Beyond five years there is no prescribed rate, so the agreed IDV can be lower than 50% of the ex-showroom price.

What if my vehicle model is no longer made?

Obsolete models are also valued by agreement, usually based on prevailing market value, because a current ex-showroom price may not exist.

Can I use a valuation certificate?

For vintage, classic or unusual vehicles, insurers may ask for or accept a valuation from an approved surveyor or valuer. Ask your insurer what it accepts.

Sources

  • Standard policy wording note on IDV for vehicles beyond five years and obsolete models (determined by mutual agreement).
  • Insurer IDV determination notes on used, vintage and imported vehicles.

How we write and fact-check

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