Selling your car without insurance

Can You Buy or Sell a Car Without Four Wheeler Insurance? - Edelweiss General Insurance Blogs

22nd July 2021 8min read 1376 views

India has an incredibly well developed second-hand car market. Several agents in the market are happy to help you sell or buy a used car. But, many individuals still decide to carry out the entire process themselves. Between deciding to sell your vehicle and finally accepting an offer, your four-wheeler motor insurance policy might expire. If you do not renew it, your car sale will likely face a few troubles.

To legally transfer ownership of a vehicle, the car must have insurance cover. The transfer typically happens because of one of the following three reasons:

  • Normal sale
  • The owner passes away
  • A public auction

You need certain documents to facilitate a transfer, including a certificate of insurance. Without this crucial paper, you cannot complete all the processes involved in selling or purchasing a vehicle.

The Importance of Car Insurance

So, why is insurance so important? Let’s find out!

To Stay on the Right Side of the Law

A sale is only complete once the registration certificate reflects the new owner's name. But, the transfer cannot happen without valid insurance. So, to avoid getting yourself into a sticky situation, you must ensure that your car insurance paperwork is in order before making a sale or purchase.

For Cover in the Interim

It can take a little time to get everything in order before selling your car. You might want to look over a few offers before accepting one. If you happen to use your vehicle during this time, you will need the insurance cover.

To Facilitate Safe Test Drives

Nobody wants to buy a car before taking it out for a test drive first. If a potential buyer wants to take the vehicle for a spin, you need to have insurance. Apart from the legal requirement, the insurance policy will protect your pocket in case of an accident.

Striking the Right Balance

So, is it worth spending money for an insurance premium if you’re about to sell your car? The short answer is yes. But, there are ways you can enjoy the best of both worlds. Depending on how often you intend on using the car before selling it, you could consider getting basic cover. So, the coverage will extend to own damages as well as third-party cover, but not much more than that. The premiums for a basic policy without add-ons will not cost as much as a comprehensive plan. Alternatively, you could downgrade to a basic third-party only plan. While this will cost much less, it will not provide you or your vehicle with any coverage.


Once the sale is complete, you must transfer the insurance policy as well. As the new vehicle owner, make sure you check the existing insurance policy thoroughly. If the coverage doesn’t meet your standards, check what’s available from other motor car insurance companies. Upgrade the plan so that you have the kind of coverage you need. As the seller, you should transfer your No-Claim Bonus from your old vehicle to your new four-wheeler insurance policy. With all the paperwork done, you can go ahead and enjoy your new car.

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