Buying and selling used cars have become a very common practice in India. It saves a lot of money, which is what makes this a favorite choice among young car owners. Insurance is an important part of the buying process. The car insurance policy for a used car comes with different clauses and knowing them is important for the policyholder. When you are buying a used vehicle, remember to transfer the policy to your name. If you are the seller then you must know that the No Claim Bonus cannot be transferred to the buyer. So, you must claim it when you still have time.
There are other things to consider regarding insurance for buying or selling a used car. Here are seven of them to help you with the process:
- Transfer car insurance
The process of transferring insurance is easy. When you have decided to sell your car and have found a buyer, you have to inform your insurance provider about that in writing. The insurer will then transfer the papers to the buyer’s name and he or she will become the policyholder.
- Calculate the sum assured
The sum assured is the pre-decided amount of money that the policy provider pays you in case of damage to the vehicle or theft. The sum assured value depends on the Insured’s Declared Value (IDV) and the actual price of the car. The IDV depends on the depreciation value and the current value of the car.
- Know what affects the premium
The value of the premium for your car insurance depends on different factors. Firstly, the premium largely depends on the insurance company as it is a competitive market, and different companies come up with varied offers on the premium. Other than that, the premium also depends on the value of the accident cover, the IDV estimation, discounts, and many other factors. The model of the car, seating capacity, and fuel type are also important factors that determine the premium. Some insurance companies can offer you a lower premium by reducing the IDV. That may affect you in the long run as it will significantly lower the sum assured.
- Understand the components of motor insurance
There are two main components of motor insurance. The first one is the ‘own damage’ cover, which pays for repairing or replacing your insured vehicle. The second component is the ‘third- party’ cover. This one pays for your liabilities if your vehicle damages any property or other vehicles. A comprehensive policy that covers both is the one you should buy for your used car.
- Select the right company
When you buy online car insurance, it is easier to find the right insurer. The best ones are the insurance companies that are historically known for quick settlements.
- Understand the premium payable while insurance renewal
During the renewal of car insurance, if no claim is made then you will have to pay a lower premium than the premium you had paid last year.
- Make sure that the car has proper documents
When you are buying a used car, make sure that the registration documents are in order. Otherwise, your insurance claim will be rejected in the future.
Follow these important tips to get the best deal out of your car insurance for used vehicles.