IDV vs Ex-Showroom, On-Road and Market Value: What’s the Difference?
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In this guide
Key takeaways
- Ex-showroom price is the starting point for IDV; on-road price adds registration, road tax and insurance.
- IDV is ex-showroom minus age-based depreciation — the insurer’s agreed value for the year.
- Market (resale) value is what a buyer would pay today and can be above or below IDV.
- On theft or total loss, the insurer pays based on IDV, not on-road or resale value.
Car and bike buyers meet four different “prices” for the same vehicle. Mixing them up is the main reason owners are surprised by insurance payouts. Here is what each one means.
The four values side by side
| Value | What it includes | Where it is used |
|---|---|---|
| Ex-showroom price | Manufacturer’s listed price of the variant including GST/cess on the vehicle | Base for IDV |
| On-road price | Ex-showroom + registration + road tax + first insurance (+ often FASTag, extended warranty, accessories) | What you pay the dealer |
| IDV | Ex-showroom − age-based depreciation + declared accessories − depreciation | Sum insured; theft and total-loss payout |
| Market value | What a buyer would pay for your vehicle today | Selling; agreed IDV after five years |
A worked example
Suppose a compact SUV has an ex-showroom price of ₹9,00,000. Registration and road tax add ₹95,000, the first-year insurance premium is ₹32,000 and the dealer adds ₹15,000 of accessories and charges.
- On-road price: about ₹10,42,000.
- IDV in the first policy year: ₹9,00,000 × 95% = ₹8,55,000 (plus any declared accessories at 95%).
- IDV at the second renewal (24 months): ₹9,00,000 × 80% = ₹7,20,000.
If the SUV were stolen in its first year, the IDV-based payout would be roughly ₹1.9 lakh below what was paid on the road. That is the gap Return-to-Invoice cover is designed to fill.
Why IDV and market value drift apart
The depreciation schedule is a convention applied to every vehicle equally. The used market is not. A model in high demand can sell for more than its IDV after three or four years; a model with weak demand can sell for less. For the first five years insurers stick to the schedule, so IDV and resale value can differ. After five years IDV is agreed and moves closer to real market value.
Which one should you use?
- Buying insurance: check that the IDV is close to the schedule value of your ex-showroom price.
- Comparing quotes: compare at the same IDV or use premium per lakh of IDV.
- Selling your vehicle: use market value; IDV is not a fair selling price.
- Planning for the worst case: compare IDV with what it would cost to buy the vehicle again (the on-road price) and decide whether RTI is worth adding.
Why a brand-new vehicle’s IDV is 95%, not 100%
The depreciation schedule starts at 5% for vehicles up to six months old, so even on the first day of ownership the IDV is 95% of the ex-showroom price. Combined with the exclusion of registration and road tax, the first-year IDV of a car is typically around 80%–88% of the on-road price, depending on your state’s road tax.
Finding the ex-showroom price of an older vehicle
- Your original purchase invoice (it lists the ex-showroom price separately).
- Your previous policy schedules — the IDV divided by (1 − depreciation) gives the ex-showroom figure the insurer used.
- The insurer’s own system, which holds prices by model, variant and year.
See your IDV and the invoice gap for the next five years.
FAQs
Why does ex-showroom price differ between cities?
Ex-showroom prices can vary by state and city because of dealer pricing, logistics and local levies. Insurers use the figure for your city or registration location.
Does IDV include the first insurance premium?
No. Insurance, registration and road tax are excluded from IDV.
Can I sell my car at its IDV?
IDV is an insurance figure, not a market price. Buyers will pay what similar vehicles sell for in your area, which may be more or less than the IDV.
Sources
- Definition of IDV in standard Indian motor policy wordings (ex-showroom basis; registration and insurance excluded).
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