Secure Your Car With The Super Car Insurance Plan!

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Secure Your Car With The Super Car Insurance Plan!

Believe it or Not! Save upto* 75% on TATA AIG Car Insurance

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Used Car Valuation

  • Author :
  • TATA AIG Team
  • Published on :
  • 05/12/2023

Buying your own car is one of the best feelings in this world. For those who do not have the budget to purchase a brand-new car, investing in a used car is a very smart and cost-effective option. After certain modifications and securing it with a suitable car insurance policy, it can become as good as a new car.

If you are all set to purchase a second-hand car, you should understand the process of used car valuation. Not only will it help you determine the right resale value of the car, but it will also help you decide whether it is worth buying or not.

This blog is all about car resale valuation. We will discuss various factors that affect the resale value of a four-wheeler and how you can calculate used car value before putting your money in it.

What is Used Car Valuation?

Used car valuation is a method of checking the resale value of a used car on the basis of several factors, such as the make and model of the car, its depreciation value, and a few others.

It is an important process that helps a second-hand car buyer estimate the correct value of the used car and saves them from getting scammed by the wrong seller.

Factors Affecting Car Resale Value

The value of a brand-new car starts depreciating from the moment it leaves the showroom and hits the road. Unlike the value of real estate, the price of the car decreases over time on the basis of the following factors:

Rate of Depreciation: The value of a car decreases with each passing year based on a certain rate known as the rate of depreciation. This rate depends on multiple factors, such as the market demand for the car, its mileage, and so on.

Generally, a car's value depreciates to around 20-25% in the first year and 10-15% with each passing year. Let us understand this with an example: if you purchase a car for ₹10 lakh, its value may become ₹7-₹8 lakh after one year of purchase and decrease to just ₹6-₹7 lakh after two or three years.

Kilometres Completed: Another factor that defines the resale value of a car is the total kilometres it has driven. For obvious reasons, a car that has run for a higher number of kilometres has a lower resale value than a car that is only driven for a few kilometres.

Make and Model: The make and model of a car is the first thing that comes into mind when purchasing a car. The reason is simple: some car brands and models are more in demand than others. So, if you are purchasing a popular car model, be ready to pay a higher price than a relatively less popular newer model.

Year of Purchase: A four-wheeler’s age also adds to forming its resale value. If the car is purchased recently, it will come at a higher price than the car purchased a few years back.

Overall Condition: Finally, the overall condition of the vehicle also helps in calculating its resale value. For instance, if the car is well-maintained, there are no major dents or scratches and it works efficiently, it will offer a higher resale value.

Apart from the ones mentioned above, a few other factors, such as the location and colour of the car, also affect its resale value.

How to Calculate Used Car Value?

How can I find the resale value of my car? If this question is bothering you, here is your answer:

The best way to calculate used car value is to use a car valuation calculator. You can easily find multiple car valuation tools and websites online. They use the above-mentioned inputs to calculate the closest resale value of a second-hand vehicle.

But be aware not every car valuation calculator is reliable. Hence, use the one from a reputed provider or a website.

Things to Consider When Purchasing a Used Car

Buying a personal vehicle is an important investment. If you are low on budget and need a car, then buying a used car is not a bad choice at all.

Because of depreciation, you can easily get a car in good condition but at a low price. However, there are certain things to consider before making a final decision. These are mentioned below:

Identity Your Budget

First things first, take some time to define your budget. Although you are not purchasing a new vehicle, deciding on an upper limit will help you manage your finances better. It will also prevent you from overspending.

So, decide on a budget and stick to it. Since it is a used car and its value will depreciate further in the coming years, avoid pushing yourself into significant debts.

Determine the Resale Value

We have already discussed how you can calculate the resale value of a used car. Now, all you need to do is double-check the price using a reliable used car valuation calculator and match it against the price that is quoted to you.

If the seller has charged a higher price than the resale value, it is clear that they are over charging you. So, try to negotiate, and if they do not agree, consider looking for other options.

Purchase from a Reliable Person

Always perform due diligence before purchasing a used car. Make sure that the seller is the legit owner of the vehicle. There are many cases when some dealers sell stolen vehicles in top-notch condition at dirt-cheap prices. If that is the case, be careful, as it can lead to big legal trouble.

Pay Attention to the Paperwork

When purchasing a used car, pay special attention to its paperwork. Make sure to transfer all the registration certificates of the vehicle to your name.

Don’t Forget to Buy Insurance

Last but the most important thing, purchase a suitable car insurance policy. Having car insurance is not only a legal requirement for every car owner, but it is also a much-needed investment that offers financial security in the face of unfortunate events.

In simple words, an old car is more prone to damage than a brand-new one. Hence, to avoid spending a lot of money on repairing its unforeseen damages, purchase a suitable policy from a reliable provider like Tata AIG. With our policies, you can make a hassle-free car insurance claim and get reimbursed in cash or get cashless repairs at our network garages.

Final Words

Car resale valuation or car value check is one of the most critical aspects of purchasing an old vehicle. It is beneficial for both buyer and seller. While it allows the seller to quote the right price to the customer, it enables the buyer to decide whether or not the old car is worth buying.

We have discussed several important things about old car valuation. Now it is your turn to use the right tool to perform a used car value check and make the right purchase.

Moreover, if you find a suitable second-hand car, then do not forget to purchase suitable insurance for a 4-wheeler to secure your vehicle.

FAQS

Which car has the best resale value in India?

The resale value of a car depends on various factors such as its model, overall condition, kilometres driven, etc.

Based on these factors, some of the car brands that offer the best resale value include Maruti, Hyundai, and Toyota.

Is buying a car a good investment?

In terms of financial investment, purchasing a car cannot be considered a good investment as its value depreciates over time. However, owning a car or any other four-wheeler comes with its own benefits, such as added convenience, freedom to travel anywhere in a cost-effective way, and more. These reasons make it worth investing in.

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Disclaimer / TnC

Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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