Used Car Insurance

Buying a second-hand car helps you save costs, but it still requires proper protection. No matter how old the car is, unexpected events like accidents, floods, or theft can still happen, and you would have to pay for the repairs from your pocket. That is why it is important to protect it with used car insurance. It will not only help you stay legally compliant but also give you peace of mind knowing that you are financially secure.Read more

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What is Used Car Insurance?

Used car insurance (or second-hand car insurance) is an insurance policy that financially protects pre-owned or second hand cars. Like policies for new cars, it covers damages from road accidents, natural disasters, theft, and third-party legal or financial liabilities. Insurers decide the premium based on the used car’s age, condition, and usage. Since the vehicle has already depreciated, its Insured Declared Value (IDV) and premium is lower.

Generally, you do not need to buy a fresh insurance policy for a used car. The existing policy is transferred from the previous owner to the new one. However, it is important that the car insurance is transferred within 14 days to ensure continuous coverage and avoid claim rejection. Additionally, before issuing or transferring the policy, insurers may also require a vehicle inspection of the used car (depending on its condition & policy status) to check for any existing damage.Read more

Why is it Important to Get Used Car Insurance?

Buying car insurance is important for all car owners, whether it is a new car or a second-hand one. Here is why you should buy a used car insurance plan:

Protects from All Risks

The basic purpose of a comprehensive car insurance policy is to keep an insured car safe from all kinds of damages and losses. With the help of a second-hand car insurance policy, your used car will be secured from all kinds of unforeseen risks, such as fire, accidents, natural calamities, manmade hazards, etc.
Compulsory for All Cars

As per the Indian Motor Vehicle Act 1988, all cars plying on public roads should be covered under valid car insurance. The law applies to both new cars and second-hand cars. Therefore, if you don’t want to be penalised for using your second-hand car without insurance, you must get it insured under a used car insurance policy.
Covers Third Party Liability

If your second-hand car causes damages to a third-party property or bodily injuries to a third party person in an accident, you will be liable to pay for it. But if you have a second-hand car insurance policy, your insurance company will take care of your third-party liabilities and pay for them on your behalf.
Personal Accident Cover

A used car insurance policy not only covers your second-hand car from uncertain risks but also protects the owner-driver of the car from any accidental injuries as well as death. Thus, in case you suffer an injury in a car accident, you can get it covered with a Personal Accident Cover.

How to Transfer Ownership and Insurance of a Used Car?

When buying a second-hand car, you need to transfer the ownership of the car and the existing car insurance policy to your name. Since car insurance is mandatory in India, the used car that you are buying will likely have an insurance policy unless it has expired.

Here are the steps to transfer the ownership and insurance:

Visit the Regional Transport Officer (RTO)
Fill up an application to transfer the ownership of the car by transferring the RC of the car on your name
Submit all the documents required
Once the RC has been transferred to your name, fill up the fresh proposal form
Submit the policy form along with all the required documents
Pay the policy transfer fee
The motor insurance company will transfer the policy to your name

Make sure to cross-check your name and details on the RC and the motor insurance policy after the transfer has been made.

Documents Required for Old Car Insurance Transfer

Take a look at the list of documents that you need to submit to transfer the insurance for a second-hand car:

New Registration Certificate with your name on it
Form 29 and 30 signed by the previous owner of the second hand car
Copy of the existing car insurance policy
Your ID & address proof
New proposal form
No Objection Certificate (NOC) from the previous policyholder
Proof of transfer of RC and payment of transfer fee

How to Buy Used Car Insurance Online?

Follow these steps to buy used car insurance online:

On the 'Car Insurance' page, provide your car number, its make & model, variant, fuel type, RTO, and contact details.
Check quotes from multiple insurers, select a suitable plan, and customise the coverage by adding any necessary add-ons.
Complete the policy payment online via cards, net banking, or UPI, and instantly receive your used car insurance policy at your registered email.

What are the Benefits of Buying Used Car Insurance Online from Policybazaar.com?

Buying a car insurance policy is an effortless and speedy process if purchased online at Policybazaar.com. It is one of the most popular insurance brokers in India, offering a variety of insurance plans, including used car insurance. If you are wondering why you should buy second-hand car insurance policy from us, take a look at the reasons below:

Speedy Process

Policybazaar.com is a user-friendly website that values the time of its customers. As a result, the whole procedure of buying second-hand car insurance is very quick and simple. You just have to provide the required information and follow the step-by-step process and you will be issued with a second-hand car insurance policy instantly.

Compare All Used Car Insurance Plans at One Place

One of the most attractive benefits of buying insurance from Policybazaar Insurance Brokers Private Limited is that you can compare used car insurance plans offered by different car insurance companies. Plans can be compared based on the coverage offered and the premium charged so that you can objectively decide the plan you want to buy. Thus, it helps you make an informed decision.

Saves Money

Buying a second-hand car insurance online saves both time and money. Besides, online plan comparisons help to find a second-hand insurance plan that provides the coverage of your choice and fits within your budget. Thus, you end up saving a lot of money.

Used Car Insurance Buying Checklist: Important Things to Keep in Mind

You need to ensure the following things before buying a used car and its insurance so that you don’t face any troubles later:

Condition of the Car

The first thing that you need to check while buying a used car is to check its condition. Take the car for a test drive and closely pay attention to how it is working. If required, get it checked by a mechanic to get a better idea of its condition, especially the engine, wheels, transmission, cooling, etc.

Ownership of the Car

While buying a second-hand car, verify if the seller is the actual owner of the car. Cross-check the details on the RC with the information provided by the seller. Also, check the ownership history of the car.

Valid Car Insurance

Check with the owner of the used car if he has a valid car insurance policy. If yes, then you will have to get it transferred to your name within two weeks of purchasing the car. If not, then you will have to buy a new used car insurance policy for your second-hand car.

Car Insurance Claim History

In case you are buying a used car and planning to get the existing car insurance policy transferred to your name, you must check the claim history of the old car. You can get the details on claim history from the insurance company by providing the existing policy number.

Important Documents

Make sure to check the documents, such as original invoice of the car, car servicing bills, pollution certificate and municipality certificate (if any) at the time of buying a used car as you may be required to produce these documents at the time of transferring the ownership of the car or its insurance.

Possibility of Modifications

While using a second-hand car, make sure to check if it is possible to modify the vehicle for greater comfort, safety or value. This way you won’t feel stuck later if you want to make some changes in the car.

FAQs on Used Car Insurance

Q1. Is used car insurance mandatory?

Ans: Yes, as per the Indian Motor Vehicles Act, 1988, a third party car insurance policy is mandatory, even for a used car.
Q2. What are the benefits of buying a used car?
Ans: Buying a second-hand car has the following benefits:
- More Affordable - Used cars are available for a lower price as compared to buying a new car of the same model. This is because depreciation is applicable on second-hand cars that reduce the market value of the car.
- Lower Premium - The cost of second-hand car insurance is lower than the price of car insurance for a new car. This is because the Insured Declared Value (IDV) or the market value of the used car is lower due to depreciation. As a result, it ends up lowering the premium amount charged by the insurance provider.
- Lower Repair Cost - Repairing a new car is more expensive as compared to a second-hand car. Therefore, you will have to pay less money to repair your used car.
Q3. How much is the cost of insurance for a used car?

Ans: The insurance premium of used car insurance may vary from one vehicle to another. The condition of all second-hand cars is not the same, besides the age and value of the car also differs. Moreover, different motor insurers may charge a varying premium amount for a second-hand car insurance policy. Thus, the best way to check the cost of second-hand car insurance is to visit an insurance broker, such as Policybazaar.com, and check the used car insurance prices offered by different insurers before buying any one.
Q4. Is insurance cost less for a used car?

Ans: Yes. The premium charged for a second-hand car insurance policy is lower than the insurance cost for a new car. This happens because used cars have a lower IDV or market value as opposed to a brand new car of the same model. Thus, it reduces the cost of a used car insurance policy even though the level of coverage remains the same.
Q5. Can I drive the car without transferring insurance to my name?

Ans: If you drive your second-hand car without transferring the existing car insurance to your name, you won’t be able to make any claims with the insurance company in case of any unfortunate incident.
Q6. Is the third party cover automatically transferred to the new owner of the car?

Ans: Upon a used car ownership transfer, the third-party insurance cover is transferred to the new owner and remains valid for 14 days. During this duration, the buyer should apply for the policy transfer for own-damage coverage.
Q7. Can I buy a new car insurance policy instead of transferring the old one?

Ans: Yes, most buyers choose to buy new car insurance for their second-hand cars if the existing policy is about to expire or lacks adequate coverage.

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Disclaimer: The list mentioned is according to the alphabetical order of the insurance companies. Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website www.irdai.gov.in