Every asset gradually loses value over time due to normal wear and tear. The idea applies to almost all assets, including automobiles. Make sure you get car insurance online from a reputed company.
Let’s look at a brief example to help you better understand how depreciation works: Suppose you drive a Maruti Suzuki Swift that costs you 8.5 lakhs. The vehicle is currently four years old. According to the table of car depreciation rates above, your car should have depreciated by about 50%. Let’s compute the present value of your vehicle using this information. The present value equals the car’s purchase price, less the depreciation rate. The current value equals 8.55 lakhs – (8.5 lakhs * 50%) = 4.25 lakhs. As you can see, your Maruti Suzuki Swift’s value has decreased by about 4,25,000 over the past four years, making its current value only 50% of its original cost.
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How Can You Keep Your Car’s Value High?
Even though depreciation is inevitable regardless of how well you maintain your car, there are some steps you can take to make sure your vehicle retains its value. Here is a brief description of what they are.
Use Your Vehicle Carefully
Avoiding putting too many miles on your car is just one of the many ways you can keep its value. One of the many things that can make your car lose value is overuse, which can result in higher mileage. Therefore, the next time you’re tempted to drive to a nearby grocery store, consider taking a walk or a bike ride. This easy exercise can help you save money, improve your health, and ensure your car doesn’t depreciate too quickly. ##
Select Zero-Depreciation Automobile Insurance
By choosing a zero depreciation cover when you buy or renew your car insurance online, you can also greatly increase the likelihood that your vehicle will maintain its value. An insurance add-on known as zero depreciation cover is made to ignore depreciation when filing a claim. *
Safely Store Your Vehicle
While parking your car outside during the winter can result in engine damage, parking your car in the sun can cause the paint and interiors to fade. For this reason, it’s crucial to always keep your vehicle in a garage or other enclosed area. By doing this, you can keep it secure and stop environmental damage from happening, which could hasten the vehicle’s depreciation.
Drive Your Car With Caution
Accidents, mishaps, or even minor damages can significantly reduce the value of your car. As a result, always remember to drive your vehicle carefully and cautiously. This can lessen the likelihood that an accident will damage your vehicle. A car with a spotless history and no damages typically retains its value for much longer than cars with a history of accidents.
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* Standard T&C Apply
## All savings are provided by the insurer as per the IRDAI-approved insurance plan. Standard T&C apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.