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    Thread: Buying a Car with Expired insurance

    1. #1
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      Buying a Car with Expired insurance

      There is a car on sale whose insurance is expiring in another 2 days.
      But all sale related formalities can be completed only by end of this month.
      The Owner will not pay the insurance now and that is agreed as a part of the deal.

      Now what exactly should be done?

      A) To pay to the Seller and ask him to renew insurance in his name and then to do a name transfer to buyer name

      Or

      B) To directly get insurance in buyers name after the sale, though RTO related formalities are not yet completed

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      mclaren1885's Avatar
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      The new Insurance has to be on the new buyers name. But for that Insurance Company will mostly ask for other documents. So get the transfer of ownership done. Utmost, you may have to pay a small fine for not renewing the insurance on time. Maybe you can ask the owner to compensate for that?
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      what about the NCB? on name transfer does it get carried over ? If yes then it makes sense to get the renewal done within the expiry date and then pay for the name transfer in new name...

      Otherwise if the renewal is going to be treated as a new insurance with no NCB carried over then why bother with name transfer...straight away register in new name

      Generally, the insurance and RC book should be in same owner name

      P.S. : Ideally the seller/owner should have done the renewal and you would just have to pay for the name transfer which is way less than renewal/new insurance amount. And am not sure if you can legally sell a car without valid insurance.
      Last edited by fordfan; 17th Nov 2012 at 17:28.

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      I wonder what if you simply told him that you wouldn't bother renewing insurance on your own? If he lets insurance expire before selling his car then he will be forced to sell his car at a considerably lower price. See about this and you might not have to bother about insurance yourself.

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      Re: Buying a Car with Expired insurance

      There is no legal binding that the car owner/seller cannot sell/deliver the car without valid insurance. The buyer can always get it done within minutes of the purchase of the car. The resale value is independent of such clauses. But if I were to sell my car I would give it with a valid insurance so that the buyer does not get a point to haggle beyond limits.

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      themonk - I would suggest to renew the insurance before it expires, I am not sure what car is this but some insurance will refuse to renew if the insurance has expired also they will jack up the premium giving this as a reason.

      Renew it now and get a insurance transfer note and that should suffice and if he has any NCB then premium would be lesser.

      Quote Originally Posted by fordfan View Post
      what about the NCB?
      Buyer will not be eligible for any NCB, seller will have his NCB
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      Iam planning to go with Royal sundaram, They are giving the lowest Quote, i.e 2000 rs less for almost same IDV when compared to Tata AIG

      There is NCB of 25% from previous owner.
      Last edited by themonk; 20th Nov 2012 at 00:31.

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      Quote Originally Posted by themonk View Post
      There is NCB of 25% from previous owner.
      You cannot redeem this NCB, if the new insurance is in the old owner name then he can avail it.
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      Quote Originally Posted by mclaren1885 View Post
      you may have to pay a small fine for not renewing the insurance on time
      IIRC they won't put any fine. They will inspect the vehicle before proving the insurance if the insurance date is over.
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      Quote Originally Posted by themonk View Post
      A) To pay to the Seller and ask him to renew insurance in his name and then to do a name transfer to buyer name
      You have to follow the above procedure, as per my knowledge RTO does not do the registration transfer without valid insurance.

      Edit: See Procedure for Transfer of Ownership within the same R.T.O. as per Karnataka RTO
      Last edited by venbab; 20th Nov 2012 at 09:59.
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