Automobile industry experts are extremely bullish on the used car market in India. Alternatively called pre-owned cars or second-hand cars, this segment has taken off after ease of financing and proliferation of a number of players in this segment of the market. In March 2024, Vikram Chopra, the CEO of Cars24, said that the Indian used car market might touch $100 billion by 2034, benefitting from rising disposable incomes, growing middle class and easy financing. If you want to buy an used car, or if you own a car which you can sell later, this should be of interest to you.
One of the things that you need to know is that car insurance can have a relation with the value you can get from the sale of your car (or that you need to pay when buying one). One usually bothers about brand of vehicle, model, features etc overlooking this aspect.
Repeated insurance claim is a red flag
A comprehensive car insurance provides a shield against financial impact arising out of damage, or loss, attributable to accidents, incidents of theft or natural disasters for damage to one’s own vehicle as well as to third parties. According to Motor Vehicles Act, 1988, third-party car insurance is a necessary requirement to drive a motor vehicle in India. If you meet with accidents and claim car insurance repeatedly, the resale value of your car can be adversely impacted. From another angle, when you explore the market to buy a pre-owned car, check the incidents of insurance claim. If the claims are quite a few, you can drive a hard bargain on the vehicle or abandon the deal altogether (depending upon the situation).
No claim bonus is an assurance
As a buyer of a second-hand car, watch out for a car with no insurance claims. It indicates that the vehicle has not met with an accident. An insurance company offers a no-claim bonus if the policyholder does not file any claim in a year. Insurance companies urge policyholders not to file claims for minor damages, because if they do, it could tarnish no-claim record and eventually can drive down the resale value of the car.
Car insurance is one of the necessities if you own an automobile. The used car market in India is booming and one of the factors that impacts the cost of a pre-owned car is car insurance. It is one of the less-discussed factors. However, you should know it for your own benefit. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
