New drivers often prefer used cars. Easy maintenance, lighter on the wallet, a slower rate of depreciation, lower registration and insurance charges, lower borrowings for purchase are some reasons why they are preferred. It also helps to accommodate the comfort of traveling while managing your finances. But not just new drivers, many seasoned drivers also choose to buy a used car.
Like a new car from the assembly requires insurance coverage, used vehicles also need them. It serves dual benefits of legal compliance laid down by the Motor Vehicles Act and protection against damages and third-party liabilities. This scope of coverage depends on the type of car insurance you buy, a third-party cover or a comprehensive one.
A third party car insurance is the minimum requirement that offers coverage for legal liabilities resulting from damages and accidents either injuring a third person or causing damage to third-party property. However, it does not cover the damages to your car. Here’s when a comprehensive policy comes in handy. This policy not only protects the repairs required for your vehicle but also allows for customizing coverage to include events that are not otherwise part of the standard policy coverage.
Now that it is clear that used cars also need to buy a car insurance policy compulsorily, here are some things to know about it:
- The IDV or insured declared value of a used car is lower than a brand-new vehicle. This is due to the depreciation factor lowering its IDV and, in effect, reducing the car insurance prices. * Standard T&C Apply
- When you buy a used car, check whether it comes with security devices installed. Since most of them do not have one, it becomes an easy target for theft. Thus, you can choose to purchase a comprehensive plan that covers theft.
Transferring the insurance policy or buying a new one
When you purchase a used car, the preliminary step to complete is transferring the insurance coverage. While most buyers either skip or miss on such transfer, it attracts legal penalties. Hence, it is essential to transfer the insurance coverage after the sale. When moving a policy, you must note that only the third-party cover gets automatically transferred from the previous owner. For the transfer of own-damage cover, the insurer must make an application. Please visit the official website of IRDAI for further details.
Alternatively, you can also choose to buy a new insurance plan if the previous policy is inadequate in its insurance coverage. This can be done by approaching the new insurance company and initiating a new buying process.
Check the claim history of the policy.
A nifty way to know about any accrued policy benefits like the no-claim bonus is to learn of the claim history. It not only impacts the renewal benefits of the transferred car insurance plan but also pushes up the premium. The claim history can either be checked with the insurance company by entering the policy details or enquired with the seller.
Inspect the car
Lastly, do not forget to get your car inspected by a reliable technician. This can help you decide whether to proceed with the purchase or not, considering the vehicle’s condition.
These are some factors to consider when buying car insurance for a used car. Also, remember that insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.