Be it a new vehicle or a used vehicle, insurance is very important to have, and here’s all you need to know about insurance for used cars.
In the post-COVID-19 personal mobility has become very important, and more and more are opting for a four-wheeler. However, given the current economic conditions, buying a brand new vehicle might not the best idea for everyone. To that effect, pre-owned cars make a lot of sense, because in several cases they are nearly half the price of a new vehicle. Having said that, be it a new vehicle or a used vehicle, insurance is very important to have, and here’s all you need to know about insurance for used cars.
Why Do You Need It?
Now, the simple answer as to why you need insurance for a used vehicle is because it’s required by the law. According to India Motor Tariff, 2002, all car owners driving on the streets of India, must hold a car insurance policy that would cover any damages caused to some third party due to accidents caused by your car. Plus, having valid vehicle insurance offers you the financial support that covers all damages, injuries, disabilities or death caused due to the vehicle being in an accident. In most cases, it’s possible that the previous owner of the vehicle might have failed to renew the insurance before selling the vehicle, in such an event you should avoid buying such a vehicle or ensure that you buy valid insurance as early as possible. You can even use the point as part of your negotiation tactics to bring the price down.
How Is It Different For Used Cars?
Now all vehicles have an Insured’s Declared Value or IDV, and the IDV of a pre-owned vehicle will be lower than that of a brand new car. Now, this should mean that the premium amount associated with a car insurance policy for an old car will be lower. However, considering how a used vehicle would be more prone to situations like breakdowns or total loss, the total premium amount for the insurance policy would be higher as compared to a new car. If the car you are buying already has valid insurance, it’s important that you get it transferred to your name along with the other paperwork. The process could be a bit tedious and involves visiting the Regional Transport Office (RTO), getting the registration certificate (RC) transferred to your name, and fill up a few forms and pay the policy transfer fee. If you are buying from an organised used car seller then they generally do it for you. However, if you are buying it directly from a car owner the easier way would be to buy a new insurance policy altogether.
Documents Required For Insurance Transfer
If you decide to get an existing insurance policy transferred then as mentioned earlier, you’ll need to first transfer the ownership of the vehicle to your name and that would require the following documents.
- Application Form 29, 30 (with purchaser and seller signature)
- Original Registration Certificate (RC)
- Address Proof of purchaser
- An affidavit from the purchaser and the seller related to the transfer of ownership
- No Objection Certificate from the concerned RTO/ AETC in case of Transport Vehicles
- Appropriate fee
- Valid Insurance Certificate
Once the transfer is done, you can ask the existing insurance provider to transfer the policy to your name and that would additionally require the following documents.
- Old Insurance Certificate
- Original Registration Certificate (RC) along with transferee name (new owner or buyer)
- Application for transfer of ownership
- The required fee, if any.
Other Benefits Of Used Cars Insurance
In addition to offering financial stability from accidental damages and injuries, there are some additional benefits to getting your pre-owned vehicle insured. Firstly, given the fact that most old cars generally don’t come with security or anti-theft devices, they are targeted by thieves more often. So, having an insurance policy that covers theft will certainly go a long way. Secondly, getting a vehicle that’s insured will also give you access to its claim history which will help you determine the real condition of the car. You only need to provide the policy number to the car insurance company to know the information related to the claim history of the car.