Owning a car is a dream and a status symbol for many in India. But not everybody can afford a brand-new car. Hence, they settle for a second-hand car. In India, the market for second-hand cars is vast. You can see the car buffs and many youngsters exchanging their old car for the latest and speedier model launched in the market.
But buying an old car requires plenty of thought and investigation. One such important aspect is car insurance. Here, we would explore various aspects of car insurance for second-hand cars. Read on!
Need for insuring your second-hand car
Many people believe that it is not important or mandatory to insure your second-hand car but it is not true. Be it a new car or an old one, you must always insure it. Even though the law has made it mandatory for you to just buy Third-Party Insurance; it is strongly recommended that you purchase a comprehensive cover.
The reason for purchasing car insurance remains the same. Regardless of whether it is a new or a second-hand car, it is vulnerable to accidents on road, third-party risks, theft, damage by natural calamities like floods, earthquakes, etc.; man-made calamities like riots, vandalism, etc.
It is only with a comprehensive car insurance policy that you can stay protected and secure while driving your car on the road.
Things to look into while purchasing a used car
It is natural that you do a thorough check of a second-hand car before purchasing it. It is always recommended that you take a mechanic with you for inspection of the car to assess its correct state and extent of the damage if any. You also need to do a thorough check of the papers like the registration paper, invoice and most importantly, the insurance papers. It is always advisable to go for an insured car.
The insurance paper not only gives you the IDV or Insured Declared Value of the car but also lets you know about the times, the car has been involved in an accident, the repair done on it and various other useful insights. Only if you are assured of the cosmetic look, mechanical parts and papers of the car; should you move ahead with the purchase. This precaution will ensure that you do not face any kind of unwanted hassle in the future.
Things to Know about the insurance of an old car
While the basics remain the same, there are certain unique points attributed to car insurance of an old car.
- The premium of any car insurance policy is determined by its IDV or Insured Declared Value. It is nothing but the current market value of a car which decreases with time. Hence, the premium amount of your second-hand car will be definitely lower than its new version.
- Contrary to popular belief; the used cars are more vulnerable to theft as they often lack any security devices, are far easier to steal, dismantle and sell off its parts for easy money. Hence, you must never buy a second-hand car with the belief that it is safer. It is more important to buy insurance for them.
- Repairing an old car is easier and cheaper compared to a new one.
- If you did any mistake in the inspection of an old car; you will be more likely to face problems like a breakdown or total loss with a second-hand car. Hence, if you are going for a complete cover, you might end up paying a higher premium than you would have paid for a new car.
Purchasing an insurance policy for a second-hand car
Regarding the policy of a second-hand car, you have two options. One you can just take a copy of the old policy and other relevant documents and purchase a new policy all by yourself. The only thing you need to be careful about here is that the ownership of the vehicle is transferred in your name according to the procedure.
The second option is that you continue with the policy that already exists for the car. Here, you need to follow the procedure to get the ownership of the car and the policy transferred to your name. To get it achieved, you would need to submit a fresh proposal form along with the proof of sale. The proof is provided by a copy of the transfer of RC, Forms 29 and 30 that has been duly filled and signed by the previous owner, copy of the previous policy as well as the transfer fee. You get the transfer process completed in approximately 14 days.
It is far more convenient for many to purchase a second-hand car compared to a new one. It can prove advantageous provided you are following the right procedure and making sure that it is insured right.