Brand new Car
Just like any other machinery, cars also face wear and tear while you drive them. So, with continuous use, the overall price of your vehicle reduces, and it also decreases the efficiency. This regular wear and tear is known as depreciation. You can maintain your vehicle as much as you want and keep it in perfect condition; however, depreciation cannot be avoided.
The process that is used to determine the current market value of a specific vehicle is known as car valuation. Before getting car insurance, every vehicle has to be evaluated by an expert. Car valuation is done based on factors like the date of registration of your car, the model of your car, etc.
A car valuation check has to be done when you proceed to buy your car insurance policy. This is done so that the insurance company can calculate your premium. Vehicle Valuation is necessary also when you are selling your vehicle or purchasing a second-hand vehicle.
Car valuation needs to be done depending on various factors that help in determination of the extent of its depreciation. The key factors that have to be taken into consideration for the valuation of your four-wheeler are:
The performance and condition of your car will determine the condition of the parts. This will help you calculate the exact value of your four-wheeler in the market. If your vehicle has additional accessories which are up to date, it is likely that you will get a higher market value for your car. In some rare cases, these add-on accessories also lead to enhanced value of the four-wheeler. So, a car insurer might charge a higher rate of premium for any modifications to your vehicle. However, if you have any advanced security-enhancing systems in your vehicle, you will get a better discount on your car insurance.
The brand of your vehicle has a significant impact on your car's value, irrespective of the quality and condition of your car. Some famous car brands are also known for the significant depreciation of their auto parts. On the other hand, there are a few brands that offer good performance.
Every year, different companies release newer car models with advanced features and technologies. Every newly released vehicle comes equipped with the most advanced mechanism and features that fit the requirement and expectations of the buyer.
Hence, the year of manufacture has to be taken into consideration to be sure about the market value of your four-wheeler. If your vehicle has all the essential features required for contemporary use, you may have to pay a higher rate of premium and as well get a better car resale value.
If you have maintained your car correctly in terms of mechanism and appearance, you might get a higher market value for your vehicle. When you take depreciation into consideration, ensure that the exterior and interior of the vehicle has to be clean, scratch-less and without any fresh dents. The appeal of your vehicle has a significant role in the market value. So, if your four-wheeler is in good condition, you will be required to shed more money as the car insurance premium will be high. However, you will also get a better and enhanced car insurance claim settlement amount if you place any insurance claim for your vehicle.
In most cases, car valuation criteria or the algorithms used by insurance companies keep changing frequently as per the latest market features and developments. For car valuation online you may visit various free websites of car insurance companies.
With continuous usage, your car will face depreciation. Thus, the market value of your car will depend on the extent of depreciation.
Ans. The factors affecting the car insurance premium of a used vehicle are:
Ans. If your car is equipped with advanced safety and security features, it will protect the occupants if you are in an accident. Additionally, installing anti-theft and other security devices on your second-hand vehicle will also reduce the cost of the insurance premium as there are lower chances of theft.
Ans. NCB or No Claim Bonus is the discount on insurance premium offered by the insurance company for not making any claim. However, if you make a claim during the insurance period, the premium might be slightly higher when renewing your car insurance policy.
Ans. Unfortunately, when it comes to insurance, the value of your new vehicle will not be equal to 100% of the invoice price. A car up to 6 months old will have an approximate value of 95% of its showroom price. The value of the car keeps on decreasing as the car gets older.