Car Insurance vs Resale value : If you also want to sell your old car, then keep your insurance history strong to determine its resale value. If you only take third party insurance then the value of the car may decrease.
New Delhi. The way new car sales are increasing, it proves that the sale of old cars is also increasing at the same pace. Now there is a properly organized market for old cars. In such a situation, if you are also planning to sell your old car and buy a new one, then this information can be very useful for you. Do you know that the insurance of the car plays a big role in reselling it? If not, then understand this funda today and keep it in mind the next time you resell the car.
Zurich Kotak General Insurance has highlighted the importance of car insurance in the resale value of the car in India. When it comes to buying a car, Indian consumers consider many factors, such as the model of the car, fuel efficiency and resale value. But, one important thing that is often overlooked is the effect of car insurance on the resale value of the car. The Indian automobile market is one of the largest markets in the world, where millions of cars are sold every year. As the market is growing, the demand for used cars is also increasing.
How insurance affects resale value
As per the Motor Vehicles Act, 1988, third-party car insurance is mandatory for all car owners in India. However, if you also get comprehensive insurance i.e. insurance for damage to your own car, then it is a profitable deal. This also provides you financial protection against damage caused due to accidents, theft or natural disasters. If a car has been involved in an accident or has suffered damage, then the claim made on it can affect the resale value of the car. Buyers do not consider a car on which claims have been made many times to be safe for themselves and quote a lower price.
No-claim bonus increases value
No-claim bonus (NCB) is a discount that insurance companies offer to policyholders if the customer has no claims in a given year. A car that has a high NCB can have a higher resale value, as it indicates that the car is well-maintained and has not been involved in any accidents. The type of car insurance coverage can also affect the resale value of a car. A car that has comprehensive car insurance, which includes coverage for damage or loss caused by accidents, theft or natural calamities, will have a higher resale value than a car with only third-party insurance coverage.
Tips for car owners
- Avoid making insurance claims for minor losses or damages. Instead, bear the cost of repairs yourself so that your insurance record remains clean.
- Choose comprehensive insurance coverage to keep your car completely protected.
- Avoid making insurance claims to increase your No Claim Bonus (NCB), which can increase the resale value of your car.
- When you sell your car, provide all insurance details to potential buyers, including insurance premiums, coverage and claim history.
More benefits of no-claim bonus
If you insure your car and do not make any claim for the whole year, then the companies give you a no-claim bonus. This NCB not only increases the resale value of your car, but when you go to insure your car next year, the companies also give you a discount on its premium. This means that due to NCB, you have to pay less premium for the car.
