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Why Should You Insure a Second-hand Car?

Most middle-class families prefer investing in second-hand cars because the market value of all cars depreciates over time, making them cost-effective purchases for families in need of cars at budget prices. 

 However, the same rules and regulations apply to new and second-hand cars owners alike, which means that second-hand car insurance is mandatory for car owners, whether they choose car insurance online or purchase this policy offline. 

Why to Insure a Second-hand Car? 

Apart from the fact that it is mandatory for all car owners to own at least a third-party motor insurance policy in adherence with the Motor Vehicles Act (2019), used car owners can select comprehensive car policies or standalone own-damage motor policies along with third-party insurance to enjoy the following benefits.

Theft Protection 

Car thefts occur more often than we think, which is why investing in second-hand private or commercial car insurance acts as a financial shield for car owners. If your car is stolen, your insurance company will provide you with compensation in accordance with the IDV determined at the time of purchasing the motor policy.  

Third-party Liability 

In case your second-hand car damages another vehicle or injures a third party when involved in an accident, you will be liable to compensate from your pocket for the damage that your car has caused. However, with a comprehensive or third-party car policy, your insurer will compensate the third party on your behalf for their losses.

Man-made Risks and Natural Disasters 

With used car insurance that offers coverage for natural disasters like floods, earthquakes, landslides, etc. or man-made risks such as vandalism and riots, you can protect your second-hand car from financial losses related to such catastrophes. 

Add-ons for Extra Safety 

With comprehensive car insurance, you can avail of add-ons such as pay-as-you-drive, engine protection, 24×7 roadside assistance, consumables cover, nil depreciation cover, No Claim Bonus and much more to add more financial security to your car. 

Used Car Insurance Cost 

One prominent benefit of a used car policy is that the second-hand car insurance price is generally lower compared to a new car policy. This is because the IDV or Insured Declared Value of a used car is lesser than that of a new car, which lowers the premium rate of the second-hand car policy. 

Car Insurance for Used Cars – Points to Remember 

  • Car Inspection – The insurer will inspect your second-hand car to find out its age, condition, damages faced, how much distance the car has driven in total, how easily spare parts can be availed, etc. 
  • Claim History – At the time of buying a second-hand car, you must examine as well as validate the claim history from the previous car owner and cross-check it with the insurer. 
  • Car Policy Transfer – Similar to car registration, car policy ownership should also be transferred in your name. While it is not possible to personalise the policy before its renewal date, you can alternatively opt for a new car customised car policy for your used car. 

Conclusion 

Buying a second-hand car may be cost-effective, but without a motor insurance policy you cannot drive it. Investing in the right car plan can ensure its longevity and performance without causing you any financial loss. 

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