You have driven your current car for quite some years and there is a new model around the corner. Or you wish to upgrade from a Hatchback to a Sedan or an SUV. These are some common thought processes that a lot of car owners face on a regular basis. For the ones who have an additional parking lot and someone else to use the existing car, they would like to keep it with them. Others, well selling the old car is the only option.
In a fast-developing country like ours, there is a lot of scope for second hand cars. If you are willing to sell your existing car, it would not be too difficult to find a buyer for the same. Numerous car selling services are available in the market, which makes it easier for you to sell the car. However, there are a few things that you must keep in mind while selling an existing car.
Things such as getting the documents transferred to the new owner or the dealer, the registration certificate of the vehicle and so on. However, the most important aspect of selling your car insurance is its insurance. Whether it is the excitement of getting your new car or a sense of urgency to sell the old car, we usually tend to ignore the insurance part of it.
Here are the top 5 things that you must know when it comes to the insurance of your old car.
- Insurance Transfer
When you sell your old car, the insurance goes along with it. Since the insurance is linked to the owner of the car, the same must be transferred to the new owner. While this has got nothing to do with you primarily, you can always ask the new buyer to transfer the policy to their name.
Depending on your insurer and the rules and regulation that they have set, you might have to write a letter to the insurer asking for the transfer.
The buyer of the new car might have to pay a nominal fee for the insurance transfer. He or she can avail NCB on a pro-rata basis from the date of transfer till the policy expiry.
- Type Of Policy
The type of policy that you had for the previous car is also an important factor to consider. Being aware of the type of policy will only make the matters easier during the selling process. There are two distinct types of policies that you can buy, either a third-party liability or a comprehensive policy.
A third-party liability policy is the barebones car insurance which covers any damages for third-party individuals or properties. The plan covers damages or injuries to either properties or individuals. Whereas a comprehensive plan includes a third-party cover and adds own damage component.
No Claims Bonus is a discount that insurers offer to policyholders for being clean drivers. If a policyholder does not claim the policy within a policy term, they can avail discounts starting from a minimum of 20% for a year and all the way up to 50% for five years. It is important to note that the NCB is awarded to the driver and not the car.
Thus, on selling your old car, you get to retain your NCB. You can then use this on the new car’s insurance and bring down its premium. You just need to ask for a NCB certificate from your insurer. A couple of things to keep in mind are, that you cannot transfer NCB across different categories of car, i.e. the NCB from your hatchback cannot be transferred for your new SUV.
Also, you can retain your NCB for a period of 2 years. But as mentioned, you need to get a NCB certificate from your insurer.
On selling your old car, you can transfer the policy to the buyer. However, there is a short duration for you to get the policy transferred. The transfer window remains open for 14 days from the date of selling. The dates which get considered for the transfer are the dates on which the registration was transferred in the RTO.
- Premium Calculation
The calculation of the premium for your car insurance depends on several factors. In fact, one must not be surprised if they see different quotes from different insurers for the same car. The Insured Declared Value of the car, any discounts on offer, personal accident cover etc. are some factors that decide the premium.
The above is some of the things that you need to know when it comes to car insurance on selling your car.