[hajaar]

Hello TeamBHPers,

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 fortune 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.

[Reinhard]

Originally Posted by hajaar

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.

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 .

[androdev]

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.

[aniketi]

This is common scenario. When I sold my Ertiga 2 years back, IDV was around 5.5 but I sold it for 7.5. Normally IDV is calculated on Ex showroom price where as resale value will depend upon current value of new car which is always higher.

[Cresterk]

You can generally choose the IDV when renewing insurance. Resale is dependent on supply and demand.

[ruzbehxyz]

Originally Posted by hajaar

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

You have answered the question yourself. Keep the car and enjoy it. IDV is different and calculated on the depreciation per year of a car. Resale value is upto you. Pre owned cars are having a high value in today’s market and Toyota which anyway has good resale value, is much higher for each Toyota car.

[anjan_c2007]

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.

[stantheman]

Originally Posted by hajaar

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?

It's about whether you want to sell it or not. Plus it's your car, not your investment portfolio. So mostly heart will take the decision over head, (at least in my case ).

Originally Posted by Cresterk

You can generally choose the IDV when renewing insurance. Resale is dependent on supply and demand.

Exactly. And I'll take this a step further, its about perceived value of the car over the regular demand-supply. Add to that mess made by dealer. And you will have prices that are rather difficult to believe. I mean just look at the used Automatic hatchback market in Bangalore. Haven't seen such inflated prices anywhere apart from popcorn in multiplexes.

[Aviator_guy]

I have bought used car in the past and also sold a car. IDV never came into picture. I don't see any reason for OP to be concerned. At the end of the day, resale value will be determined by many factors and highly unlikely that someone will negotiate the price based on IDV. Unless I'm missing something.

[PrideRed]

IDV these days has nothing to do with resale value. Also IDV can be varied while renewing. Higher the IDV, higher the premium. I haven't seen anyone buying the car these days based on IDV value.

[Gupts007]

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.

[Torquedrift]

Originally Posted by hajaar

Hello TeamBHPers,

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 fortune 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.

IDV is arrived at based solely on the Ex showroom price at the time of purchase and later depreciated for every year the car gets old. The depreciation is calculated on the original ex showroom price you paid at the time of purchase and NOT the exshowrom price of the car/motorcycle as on date of renewal. The Life time Road Tax valid for 15 years is NOT covered unless a Rider is available to cover the same along with the main policy. When you sell the car the price includes the Road Tax as well as the Insurance premium you paid to renew the policy, since policy can be transferred for a nominal charge. Plus the Demand dictates the value. So don't bother about the IDV if you intend to sell the car. If you intend to retain the car, which is advisable considering it's not old, you can opt for Return to Invoice Rider in your Insurance policy. This Rider will ensure that in the unfortunate event of a Total Loss of the Vehicle you will receive the Ex showroom value of the vehicle as on the date of the claim less scrap value.
While calculating scrap value one should always insist that the remaining Road Tax value, calculated as LTT paid/15 years/12* age of vehicle in months LESS LTT paid, is deducted from the scrap value. Majority of vehicle owners dont realise that if the vehicle is officially scrapped within 15 years from the date of registration then they are eligible for a refund of the LTT paid. If say your car is scrapped ten years after Date of registration the you are eligible for refund of LTT for the remainder 5 years. When Insurance cos say scrap they don't officially scrap the vehicle, instead get it transferred to the scrap dealer who may repair and resell or worse use this RC for stolen vehicles. Insurance is only on Exshowrrom price NOT on road price, unless specifically mentioned in the policy, so the LTT is your property NOT Insurance company's. If you have extra accessories not covered in Insurance you are allowed to remove them before handing over to Insurance since it's not their property, LTT also comes under the same rules.
This was my experience with a claim more than 10 years ago, which the Insurance Ombudsman had also agreed verbally, since by the time of the appeal I had rejected the Total loss assessment and opted for repair at my cost and was reimbursed the repair cost upon instructions from the Ombudsman.
It is a long post deviating from the point raised but what I feel is relevant. If any of the info above is incorrect or changes have come about in coverage kindly correct me.

[RohanPitre]

Originally Posted by hajaar

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?

There is a Return to Invoice add-on for many insurance providers. From its description, it pays you the additional difference between the IDV and the ex-showroom price of your vehicle in case of a total loss. I'm sure there must be finer details to it, but worth enquiring.