You may wonder how to sell a car without insurance if you aren’t going to drive it and aren’t too interested in spending the time and money to insure it. However, doing so is strictly prohibited because selling your car involves a transfer of ownership. And in this case, a certificate of insurance is essential.
According to the Parivahan website of the Ministry of Road Transport and Highways, transferring ownership of a vehicle typically happens in one of the following three ways:
- During a typical sale
- If the owner were to pass away
- When it comes to public auction
In these three instances, the vehicle’s Certificate of Insurance is mentioned under the Required Documents section. Therefore, insurance transfer is an essential component of the transfer of ownership.
Reasons To Sell A Car With A Current Insurance Certificate
The critical justifications for maintaining car insurance coverage while selling it are outlined below.
- Legal Aspect
Technically, a car is sold when the new owner’s name appears on the Registration Certificate. The transfer of ownership can only be completed with insurance, as was stated in the section before this one. You require a current third-party car insurance policy to transfer property legally. Additionally, the new owner’s name must appear on the insurance policy. A third-party motor insurance policy is mandated by the Indian Motor Vehicles Act for all vehicles.
- Transitional Period
The organised used car market has made selling a car easy and convenient, but selling your car all at once might only sometimes be feasible or profitable. Before signing the contract, you should assess a few potential buyers and determine where you can get the ideal deal. This could all take some time. And use the car during this interim period. You must insure it to comply with the law and to maintain coverage against financial obligations resulting from car accidents and other unforeseeable events.
- Insurance Protection
You make the decision not to drive and not to renew your car insurance. The buyer will be invited to your parking spot, where the car is kept, and you will sell it from there—unfortunately, your neighbourhood floods. Car damage occurs. With a car insurance plan, you would not have to tolerate the majority of the repair expenses. Additionally, you also get car insurance NCB, .i.e., the no claim bonus if you do not raise claims. So, it is profitable either way. . Claims are subject to terms and conditions set forth under the car insurance policy. *
- Road Test
The car you’re about to sell isn’t covered by car insurance. A potential customer comes up to you for a test drive. You comply. You drive outside in the car with the buyer. Unluckily, the potential buyer causes a collision. The insurance provider will not cover the costs of the damages because your vehicle is uninsured.
- Financial Sanctions
Consider a scenario where you are driving your car to a licensed used car dealership to sell it without insurance. You ignore the traffic signal while travelling. A police officer approaches you and requests the standard documents, including your insurance, pollution under control (PUC) certificate, and registration certificate.
Maintaining valid insurance while selling your car helps protect you and the potential buyer during the transition process. Always consult local laws and regulations to ensure you comply with the necessary insurance requirements when selling your vehicle.
* Standard T&C Apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.
