Compare & Buy Car, Bike and Health Insurance Online - InsuranceDekho
Claim, renew, manage & moreLogin

Is It Possible to Sell a Car Without Valid Insurance?

Written by Udit Varshney
Updated On Oct 15, 20232 min read
WishBookmark

Driving a car with no valid insurance cover is unlawful. Similarly, selling your vehicle with an expired insurance policy is illegal. Several people do not renew their insurance coverage when they plan to sell their cars. They think that buying or renewing insurance for a car they are selling is a waste of money.

It is usual to make efforts to reduce related expenses once you decide to sell your car. However, to sell a car, a valid auto insurance certificate is required. One way to sell your car without spending much is to choose a third-party car insurance policy, which does not cost much, however, allows you to legally sell the car.

There are strict laws against selling your car without an active insurance certificate. Selling the car implies an ownership change. In accordance to the "Ministry of Road Transport and Highways", when there is a transfer of ownership due to normal sale, owner's death, or public auction, the car insurance policy is a crucial document in the sale.

Is It Possible to Sell a Car Without Valid Insurance?

Reasons for Having A Valid Insurance Certificate When Selling Your Car

Below are prominent reasons why you must have your car insurance policy active when selling it.

  1. Legal Angle: A vehicle is declared sold when the registration certificate shows the identity of the new owner. Without valid insurance, the ownership transfer cannot be done. The car insurance transfer must take place in tandem with the registration certificate transfer. The insurance plan has to be in the name of the new owner, too. Hence, a valid insurance policy is necessary when it comes to selling the car.
  2. Interim Period: While it has become fast and simple to sell a car, selling the car in one shot would not always be lucrative/feasible. You would like a few customers to be evaluated, and check where you can find the best offer, and then sign the contract. This will all take time. And if during this transitional time you are driving the car, you would need to ensure you a valid insurance policy to protect from financial losses resulting from vehicle collisions and any other unforeseeable events.
  3. Insurance Cover: In case, you decide not to renew your car insurance and your vehicle is in the garage. You call the customer to your garage to sell your car. Unfortunately, there is a flood in your city and your garage gets flooded. Without any insurance coverage, you would have to pay for the damages to your vehicle.
  4. Test Drive: Suppose there is no insurance on the vehicle you are going to sell. For the test drive, a potential client approaches you. However, when driving, the potential customer caused a mishap. In that case, the insurance provider will not pay for the loss, since the vehicle is uninsured.
  5. Monetary Penalties: Consider a scenario in which there is no insurance policy for your vehicle and you are taking it to a second-hand car showroom to sell it. And you break the signal. In that case, the traffic policeman would stop you and ask for your car papers, and insurance is one such crucial document. If you do not have a valid car insurance policy, then you end up paying a fine and can even be imprisoned

Bottom Line

If you sell the vehicle, the sale of ownership can only be finalized legitimately if the RC is transferred on behalf of the new buyer. Car insurance is important for that. Selling the vehicle without insurance is not the best way, considering the legal risks involved with the process.

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.

Disclaimer

This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
Author Image
Written by Udit Varshney
View Author

 Udit has built B2C segments across various industries and has had significant contributions to the insurance sector. Udit in his last stint helped set out the last mile vertical, which soon became the go-to logistics name for daily needs, In his free time, Udit likes to write and listen to poetry.

Explore more before buying Car Insurance

    must dotmust graphics

    Why to buy from InsuranceDekho?

    • Instant policy # within 5 mins
    • More than 45 Lac happy customers
    • Claim Support available all 7 days of the week

    People Also Read

    FIND RTO OFFICES BY STATE IN INDIA

    FIND RTO OFFICES BY CITY IN INDIA