Cars are the most convenient way to reach your destination without having to battle the rain, harsh cold or even the scorching heat. With a roof on your head and climate controlled with electronic aids, you can have a comfortable ride each time you drive one. These features make it a sought-after luxury in every household.
But not everyone can afford a brand-new car. That is why there is always a demand for used car in the market. The budget-friendly price tag with a host of features designed toward comfort make it an option hard to miss. In addition, new drivers choose to hone their driving skills on a used car for the reduced cost of repairs.
When you sell your car, there are two main stages to compete—first is transferring the ownership of your car and the second is transferring its car insurance policy. Other than transferring the insurance policy, the new buyer can purchase car insurance online too.
Transferring the ownership of the car
Transfer of ownerships means changing the name of the owner in the vehicle’s registration document. Registration certificate isn’t the only document where one needs to change the titleholder’s name, but road-tax certificate, PUC certificate and insurance too. At the time of transfer of the ownership, you need to submit the following forms to your regional transport office (RTO).
- Form 28: It is an application for obtaining no-objection certificate (NOC) to sell the car from the RTO with which your vehicle is registered.
- Form 29: An NOC issued by you, the seller, declaring the handover of necessary vehicle-related documents to the buyer.
- Form 30: Application for intimating the transfer of ownership. This form supports the earlier form 29 and is required to be signed by both the seller and the buyer.
Other than the above RTO formalities, transactional documents also need to be transferred which include a notarised sale deed and its delivery note signed by the buyer. In addition, a proof of payment must be shared.
Transfer of car insurance
Once the vehicle registration document is amended, the next step is to transfer the car insurance policy. It is a shared responsibility between the buyer and seller. No compensation is paid if the buyer fails to transfer the insurance policy and at the same time adhere to the timelines laid down. The buyer of your car can modify the coverage of its insurance plan based on which car insurance prices are decided.
Why is it crucial to transfer the car insurance policy when selling one?
If you are a seller of car it is equally important to transfer the insurance as it is to transfer your car’s ownership. For instance, an accident or damage to a third person occurs when you have sold the car but haven’t yet transferred its car insurance policy, the legal liability to compensate such third person for injuries and property damage rests on you instead of the new owner.
In addition to that, as a seller of the vehicle, if you have a comprehensive car insurance policy, no-claim bonus is one element that lowers your insurance premiums. This component is not attached to the car but instead the policyholder. Hence, to avail the no-claim benefits on your new car insurance plan, it is crucial you transfer the car insurance policy to the new owner.
Now that you know the importance as to why you must transfer the car insurance policy, do not delay or skip this process. Keep in mind the benefits it offers when you buy car insurance online for your new car too. Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.