We all dream of buying cars and sharing happiness with our loved ones. While we plan on purchasing a new car, we tend to check what are the various components that will save you from paying a higher car insurance premium? Let’s see if that’s even possible.
Let us first understand from the commercial perspective, why does the value of the car decrease with the increasing time? A car is a depreciating asset – this means its value keeps decreasing as time passes. Why does this happen? It happens due to multiple reasons. The value of the car is dependent on the following reasons:
- While calculating the premium it is important to note the model and the make of the car. For example, the make of the car is Honda and the model of the car is Honda Jazz.
- You must have noticed that the manufacturing year (car’s age) is a major component affecting your car insurance premiums. The higher the age of a car, the lower is its value, and thus car insurance premium also reduces. Car insurance companies use the following table to determine a car’s Insured Declared Value (IDV)
|Age of the car||% Depreciation for calculating IDV|
|Less than 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%|
**cars that are older than 5 years are not included in this table. For such vehicles, the market value is assumed to be the IDV.
- Choice of the type of car insurance policy whether it is a comprehensive one or not? When you have bought a car, it is mandatory to buy car insurance as per the Motor Vehicle Act. There are two types of car insurance policies: general and comprehensive policy. If you choose the comprehensive policy, it will cover additional benefits like third-party damages, etc. Depending on its type the premium will increase or decrease. Also, the add-on in an existing policy can increase the premium. For example, if you buy the car from an acquaintance and already have an insurance policy with the required add- on then will you get the policy renewed in your name it may increase the value of your premium
- The claimed or unclaimed history of insured cars. Whether you have a Non-Claimed Bonus or not will be decided while you renew your car insurance policy. If you’ve already made a claim against your insurance policy, you will not get any discount. If no claim was made, then the chances of discount on the insurance premium will increase.
How to save on car insurance premiums? It is always a smarter choice to go for the best policy available in the market. So, without delay, here is the best car insurance policy log on to Chola MS and get the best policy now!