How to Get Zero Depreciation Car Insurance for Used Cars in India

Understanding Zero Depreciation Insurance for Used Cars

Depreciation reduces a car’s value over time due to wear and tear, and standard comprehensive policies deduct this amount during claim settlements, leaving policyholders to cover the gap. A zero depreciation add-on eliminates this deduction, ensuring the insurer pays the full repair or replacement cost (minus compulsory deductibles). For startups, this is especially valuable for used cars, which often face higher depreciation rates, helping to keep maintenance costs low and predictable.

However, insurers typically limit zero depreciation cover to newer vehicles, as older cars have higher depreciation and repair risks. In India, most insurers offer this add-on for cars up to 5 years old, though some extend it to 7 years under specific conditions.

Eligibility for Zero Depreciation Insurance on Used Cars

Before pursuing zero depreciation cover, startups must ensure their used cars meet the following criteria:

1. Car Age: Most insurers restrict zero depreciation cover to cars less than 5 years old from the date of registration. Some providers, like IFFCO Tokio or New India Assurance, may extend it to 7 years, but this is rare and depends on the car’s condition and insurer’s policy.
2. Comprehensive Policy Requirement: Zero depreciation is an add-on and cannot be purchased with third-party insurance. Startups must have or buy a comprehensive car insurance policy.
3. Car Condition: The vehicle must be in good condition, with no major pre-existing damage. Insurers may inspect the car before approving the add-on.
4. Private Use: Zero depreciation cover is generally limited to cars used for personal purposes. Commercial vehicles (e.g., taxis) are often ineligible unless specified by the insurer.
5. Model Availability: Discontinued models may face restrictions, as spare parts availability affects claim settlements.

Steps to Get Zero Depreciation Car Insurance for Used Cars

Indian startups can follow these steps to secure zero depreciation cover for their used cars in 2025:

1. Verify Car Eligibility

• Check the car’s registration date to confirm it’s within the insurer’s age limit (typically 5 years, sometimes 7).
• Ensure the car is well-maintained, as insurers may reject coverage for vehicles with significant wear or damage.
• Example: A 2020 model car (5 years old in 2025) is eligible with most insurers, but a 2015 model (10 years old) is not.

2. Choose a Comprehensive Car Insurance Policy

• Zero depreciation is only available as an add-on to a comprehensive policy, which covers own damage, third-party liabilities, and other perils like theft or fire.
• Compare policies from insurers like ACKO, ICICI Lombard, Tata AIG, Bajaj Allianz, or New India Assurance, focusing on premiums, claim settlement ratios (CSR above 99%), and cashless garage networks.
• For startups, group policies for multiple vehicles may offer discounts.

3. Compare Insurers Offering Zero Depreciation for Used Cars

• Research insurers that provide zero depreciation cover for used cars up to 5-7 years old. Some notable options include:
  • IFFCO Tokio: Allows unlimited zero depreciation claims and covers cars up to 5 years (sometimes 7 with inspection).
    
  • New India Assurance: Offers zero depreciation for cars up to 5 years, with some extensions to 7 years.
    
  • Tata AIG: Provides zero depreciation for cars up to 5 years, with competitive premiums.
    
  • Bajaj Allianz: Covers cars up to 5 years, with seamless online purchase options.
    
• Use comparison platforms like Policybazaar, InsuranceDekho, or ACKO’s website to check eligibility and quotes.

4. Request Quotes and Add Zero Depreciation Cover

• Visit the insurer’s website or an aggregator platform (e.g., Policybazaar.com).
• Enter the car’s details: registration number, make, model, variant, year of manufacture, and RTO location.
• Select a comprehensive policy and add the “Zero Depreciation” option from the add-ons section.
• Review the updated premium, which will be higher due to the add-on (e.g., ₹2,000-₹7,000 extra annually for a mid-range car).
• For startups with multiple cars, negotiate bulk discounts with insurers.

5. Submit Documentation and Car Inspection

• Provide required documents:
  • Car registration certificate (RC)
  • Existing insurance policy (if renewing)
  • KYC documents (Aadhaar, PAN, or company registration for startups)
  • Proof of address
• Some insurers may require a car inspection to assess its condition, especially for vehicles nearing the 5-year mark.
• Schedule the inspection at a convenient time, ensuring the car is clean and functional.

6. Pay the Premium and Review Policy

• Pay the premium online via UPI, net banking, or card. Startups can opt for monthly or quarterly payments if offered.
• Download the policy document and verify that the zero depreciation add-on is included.
• Check exclusions (e.g., tyres and batteries are covered at 50%, mechanical breakdowns are not covered).
  

7. Renew On Time

• Zero depreciation cover typically lasts for the policy term (1 year). Renew before expiry to maintain continuous coverage.
• Monitor renewal reminders from the insurer or aggregator to avoid lapses, as expired policies may require re-inspection.

Tips for Startups to Maximize Zero Depreciation Benefits

• Buy Early: Purchase zero depreciation cover as soon as you acquire a used car, as eligibility decreases with age. A 3-year-old car in 2025 has a better chance than a 5-year-old one.
• Choose Reputable Insurers: Opt for insurers with high CSRs (e.g., Max Life at 99.65% or Tata AIG at 99.1%) to ensure smooth claims.
  
• Leverage Cashless Garages: Select insurers with extensive cashless garage networks (e.g., HDFC ERGO’s 9,000+ garages) to reduce upfront repair costs.
  
• Add Complementary Riders: Consider engine protection or tyre protection add-ons, as zero depreciation doesn’t cover these fully.
  
• Maintain the Car: Regular servicing keeps the car eligible for coverage and prevents claim rejections due to neglect.
• Negotiate for Fleets: If insuring multiple cars, ask for group discounts or customized plans to lower costs.

Limitations and Exclusions to Understand

While zero depreciation cover is beneficial, startups should be aware of its limitations:

• Age Cap: Cars over 5 years (or 7 with some insurers) are ineligible.
  
• Partial Coverage for Parts: Tyres, tubes, and batteries are covered at 50%, not 100%.
  
• Exclusions: Mechanical breakdowns, wear and tear, driving under influence, or commercial use damages are not covered.
  
• Claim Limits: Most insurers allow 2 zero depreciation claims per policy term, though IFFCO Tokio offers unlimited claims.
  
• Higher Premiums: The add-on increases the premium by 20-30%, depending on the car’s age and model.

Why Startups Should Consider Zero Depreciation for Used Cars

For Indian startups in 2025, zero depreciation insurance for used cars offers significant advantages:

• Cost Control: Minimizes out-of-pocket expenses for repairs, crucial for startups with tight budgets.
• Employee Benefits: Providing insured vehicles enhances employee satisfaction and retention.
• Fleet Management: Protects the value of used car fleets, ensuring operational reliability.
• Peace of Mind: Higher claim payouts reduce financial stress during accidents, allowing focus on business growth.

Conclusion

Securing zero depreciation car insurance for used cars in India requires startups to act swiftly while their vehicles are still within the 5-year (or occasionally 7-year) age limit. By choosing a comprehensive policy, comparing insurers like IFFCO Tokio, Tata AIG, or Bajaj Allianz, and adding the zero depreciation cover, startups can protect their assets cost-effectively. Platforms like Policybazaar or InsuranceDekho simplify the process, offering quotes and renewals at your fingertips. Invest in zero depreciation cover today to safeguard your startup’s used cars and keep repair costs in check.

Call to Action: Visit Policybazaar.com or InsuranceDekho.com, enter your car’s details, and get a zero depreciation quote tailored for your startup’s needs. Don’t wait—eligibility diminishes as your car ages!