Used Car Insurance: People have a lot of questions about used cars. The most important question among them is that of used car insurance. In most cases, the previous owner of the vehicle may not have renewed the insurance before selling it, in which case you should avoid buying such a vehicle or make sure to purchase valid insurance as soon as possible. You can also use this point as part of your negotiation strategy to lower the price.
What is the meaning of Used Car?
Given the current economic conditions, not everyone may be able to afford a new vehicle. Used cars are worth a lot, costing almost half as much as a new vehicle in many cases. That being said, whether it’s a new or used vehicle, it’s very important to have insurance, and here’s everything you need to know about used car insurance.
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Why is insurance necessary for a used car?
The simple answer to why you need insurance for a used vehicle is that it is required by law. According to the Indian Motor Tariff 2002, all car owners driving on Indian roads must have a car insurance policy that covers any damage caused to third parties due to accidents caused by their car. Moreover, having a valid vehicle insurance policy gives you a financial backing that covers all damages, injuries, disability or death caused due to a car accident.
What is the difference between a used car?
Now all vehicles have an Insured Declared Value or IDV, and the IDV of an older vehicle will be lower than that of a new car. Now, this should mean that the premium amount associated with the car insurance policy for an older car will be lower. However, considering that a used vehicle will be more prone to situations like breakdowns or total loss, the total premium amount of the insurance policy will be higher than that of a new car. If the car you are buying already has insurance in place, it is important that you transfer it to your name along with other paperwork.
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What is the process?
The process can be a bit tedious and involves visiting the Regional Transport Office (RTO), transferring the Registration Certificate (RC) in your name, filling out some forms and paying the policy transfer fee. If you are buying from an organised used car dealer, they usually do this for you. However, if you are buying directly from the car owner, the easiest way would be to buy a new insurance policy. If the car you are buying already has a valid insurance policy, it is important that you transfer it in your name along with other documents.
What documents are required?
Documents Required for Transfer of Insurance If you decide to transfer your existing insurance policy, as mentioned above, you will first need to transfer the ownership of the vehicle in your name and for that, you will need the following documents. Application Form 29, 30 (with signatures of both buyer and seller) Original Registration Certificate (RC) Address Proof of the buyer Affidavit of the buyer and seller regarding transfer of ownership No Objection Certificate from the concerned RTO/AETC in case of transport vehicles Appropriate Fees Valid Insurance Once the certificate is transferred, you can request the existing insurance provider to transfer the policy in your name and for that, you will need the following documents. Old Insurance Certificate Original Registration Certificate (RC) and name of the transferee (new owner or buyer) Application for Transfer of Ownership Required Fees, if any Other Benefits of Used Car Insurance
Benefits of hiring used car insurance
Apart from providing financial stability from accidental damage and injuries, there are some additional benefits to insuring your old vehicle. Firstly, since most old cars do not usually have security or anti-theft features, they are the most frequent target for thieves. Therefore, having an insurance policy that covers theft will definitely prove to be of great help. Secondly, insuring a vehicle will also give you access to its claim history, which will help you determine the actual condition of the vehicle. To find out information related to the car’s claim history, you just need to provide the policy number to the car insurance company.
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