IDV Calculator: Meaning, Importance and Steps to Use!

by Glenn Maxwell

The fancy car you bought three years back cost you a fortune. Recently your parked car met with a road accident and got damaged beyond repair. Your car insurance company informed you that the maximum compensation they’ll offer you is nowhere near the showroom price of the vehicle—as your car, like every other vehicle, has gone through multiple wear and tear in three years. Your car’s market value has depreciated with time. During a claim settlement, your insurer is only liable to pay you an amount based on the present market value of your car, which is less than what you paid for it in the first place. Wondering what the amount could be?  A deeper probe may introduce you to the term “Insurance Declared Value” or “IDV”. It’s the ceiling amount—and also the current market value of your vehicle—that your car insurer is willing to offer you for vehicle theft, accident or damage. But do you have to depend on your insurer to know your car’s IDV? Not really! Here’s where the IDV calculator may come to your rescue. Here’s a low-down on the IDV calculator.

What’s an IDV calculator?

IDV calculator is a tool that helps measure the present market value of your car. The IDV is calculated by deducting the depreciation rate applicable on the vehicle from the manufacturer’s actual selling price. The basic formula for measuring your car’s IDV is:

IDV=Car’s showroom price (barring insurance and registration costs)–depreciation value

If the car accessories were not provided by the manufacturer at the delivery time, the prices of the same will be excluded from the car’s selling price. Hence, the amount spent on the accessories will be considered as an extra cost. Here, the IDV formula stands as follows:

IDV=(Car’s showroom price–depreciation value)+(cost of the accessories-depreciation value of the accessories)

The car depreciation rates fixed by IRDAI are:

  1. For all parts made of rubber, including tyres and tubes, plastic and nylon parts as well as airbags and batteries are depreciated at 50%
  2. All components of fibreglass are depreciated at 30%
  3. There is NIL depreciation for glass parts

For other parts, including the parts made of wood, it follows this table:

Automobile’s age Depreciation rate (%)
< 6 months 5%
6 months-1 year 15%
1 year-2 years 20%
2 years-3 years 30%
3 years-4 years 40%
4 years-5 years 50%


The IDV of vehicles more than 5 years, including obsolete models, is depreciated as per an understanding between the insured and the insurer, depending on the condition of the vehicle.

Steps to use IDV calculator: an illustration

The showroom cost of your car was Rs.5 lakh two years back. It includes the accessories cost. The depreciation value of your car after two years (not exceeding three years) will be 30% of Rs.5 lakh. The IDV of your car at present stands at:


You can calculate your car’s IDV using an online IDV calculator as well. Punch in the required information—such as the make and model of the vehicle, car’s age, registration date and city, etc.—and you are good to go.

Factors influencing your car’s IDV

The IDV of an automobile that’s older than five years depends on a lot of factors:

1 Car’s age

It is a vital factor in determining your vehicle’s IDV. The older the car, the lesser the IDV and vice versa.

2 Car type

A car’s IDV value depends on its type—a sedan or an SUV usually has a greater value compared to a hatchback.

3 Car’s make and model

A car’s make and model go into deciding its IDV. A BMW 3-series costs more than a Mahindra Bolero. Hence, the former will quite naturally have a greater IDV than the latter.

4 Place of purchase

A Tata Safari costs more if you buy one in Mumbai as compared to Ahmedabad. Hence, the same vehicle would have different IDVs for Mumbai and Ahmedabad. Usually, a car’s IDV is more in a metro city.

5 Customary depreciation

The value of your car starts depreciating right from the moment it gets delivered to you. The older the automobile, the more the depreciation value. This, in turn, results in decreasing IDV.

6 Car accessories

Any depreciation in the value of your car accessories influences your car’s IDV.

Why’s an IDV calculator Important?

  1. It helps evaluate your vehicle’s market value. If your car is damaged beyond repair or has been stolen, the amount you’re supposed to receive is exactly the same as your car’s IDV.
  2. It helps measure the correct premium amount. The higher the IDV, the more the premium.
  3. Claim settlements are based on your car’s IDV. An IDV calculator ensures you get the best compensation for damage claims.
  4. If your car is stolen or damaged beyond repair, the compensation you receive for your loss will be the same as that of your IDV. Check out the IDV calculator to learn more about the key factors to remember while calculating IDV.


Your car’s IDV value determines its resale value. If you take good care of your car, you can expect a resale price that’s more than the IDV, even when it’s up in years.

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