Used Car Valuation for a Loan
Why lenders fund a share of their own valuation, not the asking price — and how to close the gap.
Updated 30 September 2026 · 8 lenders trackedWhat you need to know
Before sanction, the lender sends an empanelled valuer to inspect the car. The loan is a percentage of this valuation (or of the sale price, if lower). If the seller’s price is above the valuation, the difference comes from your pocket on top of the normal margin.
Worked example
| Lender funding rule | Funding % | Loan (on ₹5.5 lakh valuation) | You pay upfront |
|---|---|---|---|
| PNB / Bank of Baroda | 75% | ₹4,12,500 | ₹1,87,500 |
| Indian Bank (upper) | 80% | ₹4,40,000 | ₹1,60,000 |
| SBI / Sundaram Finance | 85% | ₹4,67,500 | ₹1,32,500 |
Seller asks ₹6,00,000; lender’s valuer values the car at ₹5,50,000. Funding is applied to the lower figure, so you pay the ₹50,000 gap plus the lender’s margin. Bank of Baroda also caps the loan at 100% of the insurance IDV.
What valuers look at
- Make, model, variant, fuel and year of manufacture
- Odometer reading versus age and service records
- Condition: body, paint, chassis, engine, gearbox, tyres, interiors
- Accident, repaint or flood signs
- Ownership count and RC details
- Market prices for similar cars and the insurance IDV
If the valuation is low
- Negotiate the price down using the valuation report.
- Increase your down payment.
- Try a lender with a higher funding % (SBI 85%, ICICI / Tata Capital up to 100% for strong profiles).
- Walk away if the gap signals hidden problems.
Frequently asked questions
Is the insurance IDV the same as valuation?
No, but Bank of Baroda caps funding at 100% of the IDV, so a low IDV can limit your loan.
For information and comparison only. Loan terms, rates and rules change — confirm with the lender and read the Key Facts Statement before borrowing.