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What Is Car Depreciation Rate And How To Maintain Your Car’s Value

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Over time, each asset loses its worth steadily resulting from pure put on and tear. This loss in worth that an asset expertise is what’s termed depreciation. The idea applies to nearly each asset, together with automobiles. Whether or not you’re planning on promoting your automotive or holding it for a couple of extra years, it is very important pay attention to the automotive depreciation prices always. 

On this article, we’re going to check out the speed at which depreciation is utilized to automobiles and how one can be certain that your automobile’s worth doesn’t drop considerably.

What’s the Automobile Depreciation Charge?

To place it merely, the car depreciation rate is the share at which a automotive loses worth over time. In a bid to make sure uniformity, the Insurance coverage Improvement and Regulatory Authority of India (IRDAI) has set the speed of depreciation for all automobiles primarily based on their age. Take a look at the desk beneath for extra data. 

Age of the Automobile 

Relevant Automobile Depreciation Charge 

Lower than 6 months 


6 months to lower than 1 12 months 

15% of the worth of the automobile

1 12 months to lower than 2 years 

20% of the worth of the automobile

2 years to lower than 3 years

30% of the worth of the automobile

3 years to lower than 4 years 

40% of the worth of the automobile

4 years to lower than 5 years

50% of the worth of the automobile

Let’s now check out a small instance to offer you a greater understanding of how depreciation truly works. 

Assume that you just personal a Maruti Suzuki Swift, which was purchased for ₹8.5 Lakhs. Presently, the automotive is 4 years previous. In line with the automotive depreciation price desk listed above, your automotive ought to have misplaced about 50% of its worth. Utilizing this data, let’s calculate the current worth of your automotive. 

Current worth = Buy worth of the automotive – (Buy worth of the automotive * depreciation price) 

Current worth = ₹8.5 Lakhs – (₹8.5 Lakhs * 50%) = ₹4,25,000  

As you may see, your Maruti Suzuki Swift has misplaced about ₹4,25,000 in worth over the previous 4 years, bringing its current worth down to simply half of its buy worth. 

Now that you just’ve gotten a superb grasp of the idea of automotive depreciation prices, let’s now check out the measures which you can undertake to take care of its worth through the years.

The way to Preserve Your Automobile’s Worth?  

Though depreciation is unavoidable regardless of how nicely you preserve your automotive, there are specific measures which you can take to make sure that your automobile retains its worth. Right here’s a fast take a look at what they’re. 

  • Use your automotive judiciously 

One of many some ways by means of which you’ll retain your automobile’s worth is by not placing too many kilometres on it. Overusing your automotive can result in the next mileage, which is without doubt one of the many components that may trigger it to lose worth. So, the subsequent time you’re tempted to take your automotive out to get to a close-by grocery retailer, contemplate strolling or biking as a substitute. This easy train won’t solely be certain that your automotive doesn’t depreciate rapidly however may also enable you get monetary savings and develop into more healthy. 

  • Go for zero depreciation automotive insurance coverage 

One other good way to make sure that your automotive holds its worth is by choosing a zero depreciation cowl once you buy or renew your automotive insurance coverage. Zero depreciation cowl is an insurance coverage add-on that’s designed to ignore depreciation on the time of creating a declare. 

This successfully signifies that you’ll obtain all the worth of the declare with none depreciation cuts. Zero depreciation automotive insurance coverage may also help you save some huge cash by decreasing or outrightly eliminating your out-of-pocket prices on the time of an insurance coverage declare. Nonetheless, needless to say this add-on cowl is barely accessible for automobiles which might be lower than 5 years previous. 

Parking your automotive underneath the solar may cause the paint and the interiors to fade, whereas storing your automotive out through the winter can result in engine injury. That’s why it is very important all the time retailer your automotive in a closed storage or house. Doing so ensures that it stays secure and may forestall injury resulting from environmental components, which may speed up the lack of the automotive’s worth. 

  • Drive your automotive rigorously 

Accidents, mishaps, and even minor damages may cause your automobile to lose worth considerably. Due to this fact, all the time make it some extent to drive your automotive in a cautious and cautious method. This may cut back the probabilities of your automotive getting broken resulting from an accident. A automotive that has a clear document with no damages tends to carry its worth for a lot longer than automobiles which have an accident historical past.


Hope you’re now conscious of what automotive depreciation prices are and the steps which you can take to make sure that your automobile retains its worth. Now, in the event you’re planning on getting a brand new automotive, keep in mind to opt for zero depreciation car insurance. It’s a extremely underrated and infrequently missed add-on cowl that may are available in very helpful when you might want to make an insurance coverage declare. That’s not all. The add-on can be very reasonably priced and solely results in a nominal premium improve too.

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