Reasons why Car Insurance is necessary while selling car.
It's obligatory for the person who is selling the used car to have a valid car insurance cover on their vehicle. However, some car owners often choose not to renew their car insurance policy before selling their cars. Here, we'll explain why it's important to have updated car insurance, regardless of whether you plan to sell it in the near future.
Before you decide to sell your car without a valid car insurance policy, you should be aware of all the possible consequences of owning an uninsured car. Remember that you must have at least third-party liability insurance to sell a registered vehicle. Therefore, you are legally required to have at least basic insurance before you sell your car. In addition, owning a car without insurance can cause legal problems, even if it is driven by someone else. Also, you shouldn't even wait for a potential buyer to buy car insurance until they officially take ownership.
Reasons for a valid car insurance policy when selling it.
• Legal consequences
The vehicle is considered sold if the identity of the new owner is visible on the registration certificate (RC). Ownership cannot be transferred without valid car insurance. The transfer of car insurance must take place at the same time as the transfer of the registration certificate. The insurance plan must also be in the name of the new owner.
• Interim period
Although selling a car has become easy and convenient thanks to organized used car markets, it may not always be possible or profitable to sell a car at the same time. You may want to meet a few buyers, see where you can get the best price, and then sign a contract. All this can take time. And if you use the car during this temporary period, you should have valid car insurance to stay on the right side of the law and be insured against financial responsibilities arising from vehicle accidents and other such unforeseen events.
• Risky test drives
Let's say the car you want to sell is uninsured. A potential customer approaches you for a test drive. However, that potential customer taking a test drive had an accident while driving. In this case, the insurance company will not cover the damage as the vehicle is not insured.
• Financial losses
Suppose, without car insurance, you decide to drive it to a licensed used car dealership to be sold. If you are stopped by the traffic police, demanding the normal paperwork, including your insurance, pollution control certificate (STK), and registration certificate. Insurance, that's correct! Your uninsured car will make you pay a fine or other legal punishment decided by the court.
Here are some important tips for selling a secondhand car:
• Until you formally sell the vehicle, keep the insurance coverage in effect.
• Sell the car lawfully and with all the required documentation in order.
• Pay off all the obligations related to the vehicle that will be sold.
• Ensure that the ownership and insurance of the vehicle are transferred to the new owner.
• The No Claim Bonus (NCB) element can be carried over to your new car.
If you sell the car, the transfer of the RC on behalf of the new owner is required for the sale of ownership to be legally accomplished. For that, car insurance is crucial. Given the potential legal repercussions of doing so, selling the car without insurance is not the preferred option.