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All You Need To Know About Used Car Insurance

All You Need To Know About Used Car Insurance

Buying a used car has its benefits. You can get a car within your budget and even test your driving skills with a used car. Moreover, if you are looking to own a premium or a luxury car and do not want to invest a considerable amount of money in the same, you can own a used car.

When you buy a used car, you also have to get the car covered under a valid insurance policy. The Motor Vehicles Act, of 1988 mandates a liability-only used car insurance policy on the car before you take it out for a ride. So, let’s understand the policy in detail –

Table of Contents

What is a used car insurance plan?

A used car insurance policy is coverage that is allowed on used cars. The policy comes in two variants of third-party liability-only cover and comprehensive package cover. You can opt for any of these second handcar insurance plans when buying a used car.

Why should you opt for second-hand car insurance?

You need a used car insurance policy for the following reasons –

Legally mandatory 

Third-party coverage is legally mandatory. So, you need at least a third-party cover on the car before you drive it. If you are caught without a valid cover, you would suffer considerable fines and even imprisonment in severe cases.

  1. Comprehensive coverage 

    If you invest in a comprehensive old car insurance policy, you can get coverage for the damages suffered by your car. These damages might arise from natural or man-made calamities and can incur considerable repair costs. Under the comprehensive policy, however, the repair costs would be paid by the insurance company taking a huge financial burden off your shoulders.

  2. Financial security 

    The third-party coverage provides financial protection against legal liabilities against third parties if your car causes them any harm. These liabilities can be considerable, especially in the case of the death of a third party. In the absence of a used car insurance policy, the liabilities can cause a financial strain on you.

  3. Security in case of thefts

    If your car is stolen, you will get a lump sum claim under the used car insurance policy. This would give you the financial means to replace the stolen car easily.

  4. Easy claim settlements

    You can enjoy cashless repairs at networked garages under comprehensive second hand car insurance plans. This allows you to get your car repaired without any financial hassles.

So, for fulfill the legal mandate and to enjoy financial security, a used car insurance policy becomes a must.

Top used car insurance plans 2022

If you are planning to cover your pre-owned car, check the table given below to get a fair idea of the top car insurance plans for used cars 2022.

Bike Insurance Company Motor Incurred Claim Ratio (2020-21) Network Garages Premium Price*
Universal Sompo General Insurance Company Limited 87.96% 3500+ network garage INR 5,310
IFFCO Tokio General Insurance 84.04% 4300+ network garages INR 11,306
Reliance General Insurance 76.89% 6200+ network garages INR 9,224
New India Two Wheeler Insurance 78.20% 216 network garages INR 6,432
Bajaj Allianz General Insurance Company Limited 68.06% Major garages are covered INR 7,633

*The Premium Prices mentioned above are of a Volkswagon Ameo Petrol (2017).

Transfer of car ownership and insurance

When buying a used car, there are two steps that you need to follow. The first is to transfer the ownership of the car from the previous owner to your name. The second is to transfer the insurance policy from the last owner’s name to your name. Here’s how you can go about both these steps –

  1. Transferring car ownership

    The first thing to do is to transfer the ownership of the car before you can apply for a transfer of insurance. The ownership of the car can be transferred through the following steps –

      • You would have to inform the RTO of the change in ownership so that the RC book of the car is duly updated with the new buyer’s details.
      • To inform the RTO and file for a change of ownership, you would have to fill up and submit three RTO forms. These forms are as follows –
        1. Form 28 is the form for the No Objection Certificate
        2. Form 29 is the form for the transfer of ownership
        3. Form 30 which is an intimation for the transfer of the car

    Both the seller and the buyer of the used car would have to sign these RTO forms before they are submitted to the RTO.

      • You would also have to pay a fee for the transfer of ownership in the RC book. This fee would depend on the RTO where the car is registered.
      • Other documents would also be needed to complete the transfer of ownership. These documents should be attached to the RTO forms and submitted to the RTO. The documents are as follows;
        1. Registration certificate (RC Book)
        2. PUC certificate
        3. Tax certificate for the road tax paid on the car
        4. A declaration by the car owner stating that he/she intends to sell the car
        5. Copy of the insurance policy
        6. An affidavit stating the change in ownership of the car
        7. Address proof of the car buyer

    Once the documents are submitted and the application is made, the RTO will change the ownership and issue an updated RC Book for the car.

  2. Transfer of insurance

    Once the ownership is transferred, you can transfer the insurance policy from the seller’s name to the buyer’s name. Here’s the process –

    • The seller needs to inform the insurance company of the change in ownership of the car. This information should be given in writing.
    • If the seller has any No Claim Bonus (NCB) to his name, the insurance company would issue an NCB certificate to the seller before transferring the insurance policy
    • You would have to submit some documents to transfer the policy. These documents include the following –
      1. The updated RC book. If the RC book is in the process of being updated, you can also submit Form 29
      2. NOC from the seller
      3. Existing policy bond
      4. New proposal form for insurance
      5. Vehicle inspection report
      6. The difference premium payable

    Once the application is submitted along with the documents, the insurance policy would be transferred in the name of the new buyer.

Buying new car insurance for a used car

Rather than getting the ownership transferred in the existing policy, you can also opt for a new car insurance policy. To do so, you can buy the policy online or offline. For buying offline, you would have to get in touch with an insurance agent or a broker. Alternatively, you can visit the branch of an insurance company and apply for a new policy.

The online mode, on the other hand, is much easier. You can simply visit the website of an insurance company or an insurance aggregator and buy a new used car insurance policy. Provide the details of the car and the premium would be shown. Compare the premium and the coverage benefits and buy the best second-hand car insurance policy.

Steps to buying new insurance for your second-hand car

  1. On Turtlemint’s website go to “Get Car Insurance Quotes”, enter the car registration number
  2. Enter the required information such as city and RTO, make and model of the car, year of registration, etc.
  3. Select Petrol, CNG, Diesel, and CNG External Kit as vehicle fuel type.
  4. Enter personal information such as name, email, and phone number and check the premium amounts for the various plans.
  5. Choose a plan that meets your coverage requirements and financial limits.
  6. Choose the additional coverage through Add-Ons if you want and complete the payment of the final premium amount.
  7. Used car insurance will be provided once payment is complete once the payment is processed.

Why choose Turtlemint for used car insurance?

Turtlemint is an online platform that allows you to buy an old car insurance policy online without hassles. The reasons why Turtlemint can be the best mode of buying a car insurance plan are as follows –

  1. You can buy the policy instantly online by following a simple process
  2. Turtlemint is tied up with the leading car insurance providers of India. You can, thus, get the best coverage benefits through Turtlemint’s portal.
  3. Turtelmint allows you to compare and choose the most suitable used car insurance policy which offers the most comprehensive coverage benefits at the lowest used car insurance prices
  4. At the time of claim, Turtlemint gives you complete assistance to get your claims settled quickly and easily.

So, visit https://www.turtlemint.com/car-insurance/ and buy the best used car insurance policy.

Things to check before buying a second-hand car

If you are thinking of buying a second-hand car for your needs, here are some things that you should check –

  1. Check the usage of the car. Buy a car that has a useful life left. Try and avoid very old cars as their maintenance costs would be high
  2. Opt for a model that fits your budget
  3. Do a thorough inspection of the car to find if it is damaged anywhere and to assess its present condition
  4. Try and buy a second-hand car from reputed dealers, online or offline

Make sure the ownership is successfully transferred after buying the car

Do your research and select the best car. Don’t forget to add the used car insurance policy when you buy a second-hand car.

Read more:

Frequently Asked Questions

  1. Within what duration should I get the insurance policy transferred after I buy a used car?

    The transfer of the insurance policy should be done within 14 days from the date of sale of the car. During this period, the third-party cover would continue to apply. However, if the tenure of 14 days expires, the third-party coverage would cease.

  2. Where can I get the RTO forms for the change in ownership?

    RTO forms can be downloaded online from the Parivahan website. The link is https://parivahan.gov.in/parivahan//en/content/download-forms. You can also get the forms at the RTO itself.

  3. Can I opt for only third-party cover on the second-hand car?

    Yes, you can opt for only mandatory third-party cover. However, if you do so, any damages suffered by your car will not be covered. Moreover, if your car is stolen, you will incur a considerable loss. So, it is always better to opt for a comprehensive policy.

  4. Would the used car insurance policy cover all types of damages?

    A comprehensive used car insurance policy covers most types of damages. However, there is a list of policy exclusions that you should check. This list states the damages which are not covered by the policy.

  5. What add-ons are offered under comprehensive old car insurance plans?

    A range of add-ons is available under comprehensive old car insurance plans. Some common ones include zero depreciation cover (provided the car is not more than 5 years old), roadside assistance cover, engine protection cover, NCB protection cover, etc.

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