Owning a car is a dream of many Indians. However, considering the cost of some latest models, not to mention the maintenance expenses, people have started to look at second-hand cars to fulfil this dream. In India, you can buy a used car or second-hand car in three ways:
Directly from the vehicle owner
Franchised pre-owned dealer
Used car brokers
Among these options, the most cost-effective way of buying a used car is by contacting the vehicle owner directly. It is a bonus if you know the seller, which allows you to negotiate a deal within your set budget.
On the other hand, buying a second-hand car from a broker or franchised pre-owned dealer will give you a wide range of car choices. You can then shortlist cars based on your budget, brand, desired specifications, and features. Moreover, you can even evaluate the said specifications and condition of each shortlisted car before taking a final decision.
Besides having access to a variety of deals, buying a used car from a broker or franchised pre-owned is reliable, which might not be the case when you purchase it directly from an owner. Irrespective of your method to buy a second-hand car, second-hand car insurance is a mandatory document. Let us learn about it in detail.
Car insurance plays a vital role when it comes to purchasing automobiles. Similarly, used car insurance is equally imperative for a second-hand car. The meaning and purpose of the policy remain the same. Having second-hand car insurance ensures that your vehicle is protected in case of accidents, theft, or natural/man-made calamities.
However, you need to be mindful to check the insurance history of the said car before buying it. Get in touch with the existing insurer of the second-hand car you intend to purchase to verify the claim history (if any). Additionally, note that you (the buyer) have to transfer the ownership of the insurance policy to your name within two weeks of purchase.
Whether it is a new car or a used one, a car insurance policy is a mandatory legal requirement. If you wish to legally drive on Indian roads, a third-party car insurance policy is imperative. In this scenario, you need to insure the second-hand car with a used car insurance policy. A few reasons to do so are as follows:
Safeguards the Vehicle from Risks
A used third-party car insurance covers you against third-party liabilities. For extensive coverage, it is best to buy a comprehensive used car insurance plan for your second-hand vehicle. The policy covers you and your car against all adversities and risks.
Avoid Traffic Penalties with a Valid Policy
If you fail to present a valid used car insurance policy to a traffic police officer when asked, it will lead to hefty penalties. As per the New Motor Vehicles Act, 2019, the traffic challan issued for driving without a valid car insurance policy is ₹2,000 and/or imprisonment of up to three months for the first offence. For subsequent offences, the fine is ₹4,000 and/or imprisonment up to three months.
Protection Against Third-Party Liability
One great thing about buying comprehensive used car insurance is that the policy covers loss/damage to a third-party’s person or property in addition to covering the expenses for damage to your vehicle.
Personal Accident Cover
With a comprehensive used car insurance plan, partial or permanent disability because of accident(s) is covered. The insurer will cover the treatment cost of the injured.
As stated earlier, when buying a second-hand car, it is essential to transfer the ownership of the vehicle along with its existing car insurance policy (unless expired) under your name. Make sure that you complete the transfer process within two weeks of purchasing the used car.
Follow the below steps to transfer the existing ownership of a used car insurance policy:
Visit the nearest Regional Transport Office (RTO).
Apply to transfer the ownership of the car by transferring the registration certificate (RC) of the vehicle to your name.
Submit the requested documents.
Once the RC is transferred to your name, fill out a fresh proposal form for transferring the existing car insurance policy.
Submit the policy form along with the necessary documents.
Pay the insurance policy transfer fee.
The insurer will transfer the policy under your name shortly.
Note: Remember to check the details on the RC and insurance policy after the transfers.
Here’s a list of documents you need to submit along with the policy form.
Form 29 and Form 30 signed by the seller (previous owner)
Copy of existing car insurance policy
Certificate of Insurance
No-Objection Certificate (NOC) from the seller
Proof of transfer of RC and transfer payment fee receipt
A new copy of the RC
No-Claim Bonus (NCB) difference amount (if any)
If the second-hand vehicle that you are planning to purchase does not have a valid car insurance policy, you must buy a used car insurance plan for the same. Follow the steps below to buy a used car insurance plan for a second-hand vehicle at Finserv MARKETS online:
Provide Necessary Personal Details: Begin by entering the used car’s registration number and mobile number.
Provide Necessary Vehicle-Related Information: Complete the application form and enter the details of the second-hand car.
Make a Choice: Pick the car insurance plan that best suits your needs.
Pay the Premium: Make an instant and secure online payment.
And You Are Done: Your new car insurance policy for the second-hand car will be sent to your email address.
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If you are planning to buy a second-hand car soon, be mindful of the following things.
Condition of the Vehicle
Whether you are approaching the seller directly or via an authorised dealer, the first thing to do is to check the condition of the used car. Request to take the vehicle for a test drive and pay attention to how it performs on the road. Additionally, you can get the car checked by a trusted mechanic to know the condition of its engine parts, wheels, transmission, and other components.
Ownership of the Vehicle
Before you seal the deal on the used car, verify if the seller is the actual owner of the vehicle. Also, cross-check the details on the RC and insurance policy.
Validity of the Car Insurance Policy
In addition to checking the ownership of the used car, also check whether the vehicle has a valid car insurance policy. If yes, you will have to get the policy transferred to your name within two weeks of purchase. If not, you will need to buy a fresh used car insurance policy to be able to drive legally on Indian roads.
Moreover, if you are wondering how much a new second-hand car insurance might cost you, use the car insurance premium calculator to determine the same.
Insurance Claim History
If the used car comes with an existing car insurance policy, make sure that you check its claim history. You can get the details of the previous claims on the vehicle via the insurer using the existing car insurance policy number.
Along with car insurance policy documents and RC, ensure that you acquire the original invoice of the car, servicing bills, PUC, and municipality certificate (if any) at the time of handover. These documents come in handy when transferring the ownership of the car to your name.
If you are planning to sell your existing car, here are three tips that will help you fetch the best deal:
Get the Vehicle Serviced
Prospective buyers are bound to check the condition of your car before finalising the deal. Hence, you must get the vehicle serviced before putting it up for sale. Also, resolve any minor scratches and bumps on the vehicle as these factors can reduce the price of your car even further.
Deep Clean the Vehicle
Get the car thoroughly cleaned (interiors+exteriors) from a professional before putting it up for sale.
Quote the Highest Desired Selling Price
Every successful deal involves a little negotiation. Therefore, it is best to quote the highest price at which you plan to sell your car based on market research. It will ensure that you secure a good deal even after negotiation.
Some of the top car models that usually sell under the ‘used cars in India’ category are as follows:
Yes. You can buy second-hand car insurance at Finserv MARKETS. The process is similar to buying a new car insurance policy on our platform. You can refer to the steps to buy used car insurance explained in the article above.
You need the following set of documents to transfer the ownership of a car to your name:
Original purchase invoice
Registration Certificate (RC)
Car insurance policy papers
Road Tax Receipt
No Objection Certificate (NOC)
Yes. Used car insurance attracts lower premium rates as compared to buying car insurance for a new vehicle. It is because second-hand cars in India have a lower Insured Declared Value (IDV). This further reduces the overall cost of the car insurance policy, even if the scope of coverage remains the same.
You can use the car insurance premium calculator to determine the policy cost for the used car you desire to purchase.