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Things to Know Before Buying an Insurance Policy for a Second-Hand Car

Insurance Policy for Second Hand Car

Buying a brand-new car is always preferred to enjoy the latest technology and specifications. However, considering multiple factors like budgets, usage, and more, purchasing a second-hand car can be wise. Used cars are sold through multiple outlets, including rental car companies, leasing offices, auctions, rental companies, etc.

The level of depreciation of vehicles substantially differs in importing and exporting countries due to the varying income levels.

This means the vehicle price rapidly depreciates in high-income countries than lower income. In addition to this, individuals need to know about car insurance policies to cover themselves financially.

Learn About Used Car Insurance

While most individuals prefer purchasing brand new cars, a substantial section is inclined towards second-hand cars. The primary reason is being available at lower prices compared to a new car of a similar model. However, whether it is a new or a used car, protecting it from risks and damages is crucial.

One of the best ways to do that is to avail of an old car insurance policy, just like the one purchased for new cars. It is a policy to safeguard your second-hand car from unforeseen adversities or dangers that can result in substantial losses or damages. In addition, it offers similar financial coverage that a new vehicle gets under its insurance policy.

Thus, a used car insurance policy financially protects your car from third-party liabilities and own damage probabilities. Although most buyers fail to understand its significance, it will eventually safeguard one from future expenses.

Why is it Important to Get Your Used Car Insured?

Purchasing a four-wheeler insurance policy is crucial for all vehicle owners, irrespective of the car’s age. To know the significance of your used car insured under a second-hand car insurance policy, look at the pointers below:

  • Protects From All Risks and Damages
    Purchasing a comprehensive car insurance policy from a reputed corporate agent like Bajaj Finance Limited (BFL) will allow vehicle owners to protect their vehicles against a wide range of damages to both the vehicle and the injured persons. Partnered with top insurance providers for years, BFL offers policies by keeping the proposers’ interests in mind. With the help of these policies, both new and used cars will be protected against any unforeseen events and risks.

  • Financially Covers Third Party Liability
    If your car damages any third-party property or injures a third person in an accident, you will have to pay for the loss. However, having a third-party insurance policy will allow a policyholder to remain stress-free. The insurance providers will pay for the entire damage.

    On the other hand, individuals can purchase third-party insurance online for two-wheelers from reputed insurance providers, providing similar financial coverage against any loss or damage.

    Furthermore, a third-party two wheeler insurance plan includes reasonable premiums and add-on benefits. However, the zero depreciation add-on cover is only available under this insurance plan.

  • Personal Accident Cover
    Purchasing an insurance plan for a second-hand car covers the risks and damages and safeguards the owner or driver of the car from expenses arising out of such damages.

    Furthermore, if individuals purchase a bike insurance policy online for a used bike, they will also get similar benefits and coverage for the losses. In addition, one can purchase this policy with minimal documents, and the process is fast.

    Besides that, reputed insurance aggregators also extend third-party two-wheeler insurance plans.


How to Transfer an Insurance Policy for a Second-Hand Car?

The second-hand motor insurance process works in collaboration with the ownership transfer. Once a new owner purchases the vehicle, the insurance policy of the previous owner becomes invalid. Therefore, as per IRDAI regulations, if one wants to file a motor insurance policy claim, the name and address on the insurance and registration documents should match.

This is crucial in emergencies because it comes in handy for new owners to recover the damage expenses.

To transfer ownership of the existing vehicle insurance policy, check out the steps below:

  • Step 1 - Visit the Regional Transport Officer (RTO)

  • Step 2 - Fill up the application form for transferring ownership of the car by changing the RC of the vehicle in your name

  • Step 3 - Submit all the necessary documents

  • Step 4 - Once the RC is transferred to your name, fill in the new proposal form

  • Step 5 - Submit the policy form, including necessary documents

  • Step 6 - Pay the fee for transferring the policy, and the motor insurance company will transfer the policy to your name


How to Calculate Premiums for New vs Old Cars?

The online calculators for car insurance policy premiums help calculate both new and used car premiums. However, some details may differ when evaluating these premiums. For example, in the case of new cars, you have to provide the registration number. If you haven’t received the number, you can input the registration location and estimate the premium. there would be no requirement to mention claim history and existing policy details for new vehicles.

Additionally, you can use these online insurance calculators to determine the premiums in the case of used cars. You can compare these premiums online and transfer your policy to another insurer. However, during the policy renewal process, you must mention your claim history, current insurance company, and the NCB or No Claim Bonus that you have earned. Moreover, you can include/exclude the add-on benefits during renewal to determine the payable premium.

How to Renew Your Second-Hand Car Insurance Policy Online?

To renew your used car insurance policy online, follow the steps below:

  • Step 1 - Log in to the official website of your insurance provider

  • Step 2 - Input vehicle details like car’s registration number, date, make/model, etc. Select the add-ons available on your policy

  • Step 3 - Pay the premium online to complete the renewal.

It is advised to compare different insurance providers online before opting for a second-hand car insurance policy to avoid paying higher premiums in the long run.

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