Navigating India's Second-Hand Car Boom: The Essential Guide to Insurance Transfer

India's second-hand car market is thriving, surpassing new car sales significantly. A critical yet often neglected aspect is the transfer of the insurance policy, which is crucial for legal and financial protection. Skipping this step can lead to claim rejections and legal issues for buyers and sellers.

India's second-hand car market is experiencing unprecedented growth, with 5.4 million used cars sold in 2024 alone, outstripping new car sales. This surge is driven by factors like a growing price gap between new and used cars and stricter emission norms boosting new vehicle prices.

Amid this growth, the importance of transferring the insurance policy often goes overlooked. According to the Motor Vehicles Act, car ownership must be transferred within 14 days of purchase. Though the Act doesn't penalize delays in updating insurance, failing to transfer could lead to rejections of own damage claims due to mismatched ownership details.

Insurance transfer is quintessential for both buyer and seller safety. Mallikarjun Mallannavar, Chief Claims Officer at Royal Sundaram, emphasizes, "Without this step, the policy may become void, akin to having no coverage." A detailed insurance transfer process ensures a smooth transition and avoids legal troubles.

(With inputs from agencies.)