Car Insurance For Used Cars In India

In India, the used car market is growing considerably. More and more people are seeing sense in getting a second-hand car rather than buying a completely new car. One of the biggest reasons for this change in mindset is that the value of a new car depreciates by 20% after one or two years. Is it then worth paying all that money for? Second-hand cars are not bad, just negligibly older. You can get a used car through many businesses that cater only to these orders.

The process of buying and selling of used cars may seem scary to both buyers and sellers. The checklist below shall help out both to ensure that the transaction remains hassle-free.

Checklist for sellers of the used cars

If you are the seller of used cars, here’s what you need to do.

1. Insurance transfer: One of the first things you need to do is to transfer your car insurance policy over to the buyer. Since he’s buying the car, he needs to get its existing car insurance, right? If you have paid a premium for it, add it to the car’s selling price.
   Remember to get the NCB Retention letter from the insurance company. This does not get transferred to the new owner, but gets transferred to your other vehicle if you have one, or is saved for two years till you get one. NCB is a reward in the form of premium discounts given for not raising claims for a certain amount of time.
   If you don’t want the NCB and want to cancel it, send a written letter to your insurance company and get their confirmation. After this, you won’t be charged a premium for the car insurance after selling it. Documents you need to submit are Form 51, the original policy letter, and Application for NCB retention.

2. Car maintenance records: If you still have detailed records of your car’s maintenance and repairs, you can use these to get a better selling price. 

3. Written sale contract: This transfers the legal ownership over. It includes the date of transferring, the car’s condition, the selling price, registration details, and insurance details.

Steps to take for buyer of used cars

If you are making the purchase, carefully sift through the various models and decide which is the most appropriate for you. Try not to go for sports cars and luxury cars if that does not help you. You need to pay for insurance and maintenance for the car you buy. Think about the long-term expenses. Here are the other things to see before buying.

1. The vehicle’s condition: The car needs to be in good condition. Take it for a test drive, which the seller won’t mind. Pay attention to the performance of its engine, cooling, transmission and wheels. Get a mechanic to check things over. Thus, you’ll get an idea of the car’s worth. After buying, get it checked again. It may happen that the parts were changed after your first assessment.

2. Registration details: Get all the ownership documents from the car’s seller. Also find out whether the person is indeed the owner or not. Ask for road tax receipt, and ensure the owner has paid all his dues. You also need to get the NOC from the car’s financing company.

3. Insurance details: Check out the IDF or Insured Declared Value of the car which is stated in the policy documents. This is an essential step as it gives you the car’s value you’ll get from the insurance company in case of damages and total loss claims. Keep track of NCB earned over the years for the past 3 years. Thus, you’ll know if the car was involved in accidents or needed repairs.

4. Check or auto part modifications: If the car is a used one, you can get it upgraded or changed according to your comfort, safety and value. Check the car carefully. Is it suited to getting upgrades?

You can get the seller’s auto insurance policy made in your name. Otherwise, you can get your own car insurance policy within 14 days for buying the car.