Most buyers in Delhi spend weeks choosing the car and minutes on the insurance. That is a mistake. The policy that comes with a used car is still in the seller's name, and until it moves to you, a claim can be delayed or refused. The law gives you a short window to fix that. If you are shopping for used cars in Delhi, here is how the transfer works and what it costs.
The 14-Day Rule
Under Section 157 of the Motor Vehicles Act, 1988, when a car changes hands, its insurance is deemed to transfer to the new owner. The buyer then has 14 days from the transfer to apply to the insurer and have the policy changed into their name, as insurer Acko explains.
That automatic transfer only covers third-party liability, the part of the policy the law requires. Own-damage cover, which pays for repairs to your own car, does not move automatically. So if you buy a car with a comprehensive policy and damage it before the transfer is done, the repair claim is at risk.
What Goes Wrong If You Wait
If the policy stays in the seller's name, a claim can be rejected or held up, because the person claiming is not the policyholder. The seller is exposed too. After an accident, legal notices and police inquiries can reach them, because the records still show their name. Neither side wants that, which is why the insurance should move at the same time as the RC, not months later.
Documents You Will Need
Insurers usually ask for the existing policy, Forms 29 and 30 from the ownership transfer, proof of the RC transfer (the updated RC or the transport department's fee receipt), your KYC documents and proof of sale, such as the sale agreement or delivery note. Some insurers also inspect the car before they change the policy. Our ownership transfer guide for Delhi NCR explains the RC side of the process step by step.
Why the NCB Stays With the Seller
The No Claim Bonus (NCB) is a discount on the own-damage premium that an owner earns for every claim-free year. It belongs to the person, not the car. When you take over a policy, the seller's NCB does not come with it. The insurer recalculates the premium and you pay the difference, known as NCB recovery, along with any pro-rated change for the rest of the policy year.
The seller keeps the benefit. They give their insurer proof of sale and ask for an NCB retention certificate, which lets them use the discount on their next car within the period the insurer allows. If you are the seller, get this certificate before you cancel or transfer anything.
Transfer the Old Policy or Buy a New One?
You have two choices. You can transfer the existing policy and pay the NCB recovery, or you can buy a fresh policy in your own name from the day of purchase. A new policy lets you pick your own insurer, add-ons and insured declared value (IDV). The seller can then cancel the old policy and ask for a refund of any unused premium, if their insurer allows it.
Compare both quotes. If the existing policy has many months left and useful add-ons such as zero depreciation, transferring it may cost less. If it is close to expiry or covers third-party liability only, a new policy is usually cleaner. Our guide to the different types of car insurance explains the options.
What the Seller's Policy Tells You
Read the current policy before you agree a price, because it says a lot about the car. Standard NCB rates run from 20% after one claim-free year to 50% after five. A five-year-old car with a 50% NCB has probably not had an insurance claim in years. The same car with 0% NCB may have had a recent claim, so ask what happened and look for repair work.
Check that the chassis and engine numbers on the policy match the RC, and note the policy type and expiry date. If the car runs on CNG, the kit should be listed; our used CNG car checks explain why. If the car was bought on a loan, the bank's name can appear on the policy as well as the RC, and it must be removed when the loan is closed. See how to check a used car for a loan.
You can check the RC, insurance and challan record together using our guide to verifying RC, insurance and challan records, and run a quick challan check before you pay.
A Used Car Insurance Checklist
Match the policy's chassis and engine numbers with the RC. Note the NCB and ask about any recent claim. Decide whether to transfer the policy or buy a new one, and compare both quotes. Apply to the insurer within 14 days of the transfer. Make sure the seller gets an NCB retention certificate and you end up with a policy in your own name.
When you have a shortlist, compare verified used cars in Delhi NCR and ask each seller for a copy of the current policy before you visit. While you are checking papers, match the kilometres too: our guide to spotting odometer fraud shows how.
Get the Hooter app for daily updates: Download the Hooter app to browse verified listings, track price changes and shortlist cars before you visit.
Frequently Asked Questions
How many days do I have to transfer car insurance after buying a used car?
14 days from the transfer, under Section 157 of the Motor Vehicles Act. Third-party cover moves automatically in that period, but own-damage cover does not.
Does the seller's NCB transfer to the buyer?
No. The NCB belongs to the seller. The buyer pays the difference in premium, called NCB recovery, or buys a new policy in their own name.
Can I buy a new policy instead of transferring the old one?
Yes. You can buy a fresh policy in your name from the date of purchase. The seller can then cancel theirs and claim any refund their insurer allows.
What documents are needed for the insurance transfer?
Usually the old policy, Forms 29 and 30, proof of RC transfer, your KYC documents and proof of sale. Some insurers also inspect the car.
What happens if I make a claim before the transfer?
A third-party claim is covered, but an own-damage claim can be rejected or delayed because the policy is still in the seller's name.