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Transfer of ownership and insurance when selling your used car

Transfer of ownership and insurance when selling your used car

With newer car models being launched regularly, sticking with the same car for years is uncommon. Most of you use your cars for five to six years and then think of upgrading to a newer model. When you buy a new car, what do you do with your old one?

Thanks to the popularity of used cars, there is a huge market for selling your old car to someone else. People buy second-hand cars when they have a limited budget and also when they are still honing their driving skills. So, when you are buying a new car, you can sell your used car. Though the selling process has been simplified by the presence of online and offline used car dealers, there are two things which you should remember when selling your old car. Do you know what they are?

Selling your used car involves two aspects –

  • Transfer of ownership of the car
  • Transfer of the car insurance policy

Let’ understand how you can go about fulfilling each aspect of transfer –

Transfer of ownership

Transferring the ownership means changing the name of the car’s owner from your name to the name of the buyer. To transfer the ownership of your car, certain documents would be required. These documents include the following –

  • Certificate of Registration (RC) of the car
  • Certificate of Taxation (CT)
  • PUC Certificate.
  • Declaration of selling the car.
  • Copy of Existing Insurance Policy
  • An affidavit which represents the change in ownership
  • Address proof of the buyer of the car

Moreover, three RTO forms would also be required which should be filled and signed by both you (the seller) and the buyer. These forms are –

  • Completed Form 28: Form of No Objection Certificate.
  • Completed Form 29: Form of Transfer of Ownership.
  • Completed Form 30: Application for intimation or report of transfer of motor vehicle.

All the documents and RTO forms should be submitted with the local RTO along with a fee and the ownership of the vehicle would be changed. The RTO, with which the car has been registered, should be informed about the ownership transfer process. This information should be given to the RTO within 14 days of selling the car. When the RTO is intimated and the transfer process is undertaken, the RTO would indemnify you (the seller) of all legal, tax, traffic, criminal and other liabilities pertaining to the car.

City Address of the RTO RTO Helpline number
Mumbai Transport Commissioner Office

Administrative Bldg., 4th Floor, Govt. Colony,

Opp. Dr. Babasaheb Ambedkar Garden,

Bandra (East), Mumbai – 400 051

022-26550932 / 33 / 34 Ext. 216
New Delhi Public Relations Officer,

Transport Department,

5/9 Under Hill Road, Delhi 110054

011- 42-400-400, 9311900800
Ahmedabad RTO Office, Subhash Bridge,

Sabarmati, Ahmedabad – 380027

Chennai First floor, Municipal Commercial Building,

New Street, Alandur,

Chennai , TN – 600016

Kolkata The Regional Transport Officer ( RTO ),

Beltala Road, Kolkata,

West Bengal – 700020

033-24751621, 033-24751622
Pune 38, Dr. Ambedkar Road,

Near Sangam Bridge, Pune 411 001

+91 20 26058080, 26058090/8282
Bangalore Commissioner for Transport, 5th floor,

M.S.Building, Dr.B.R.Ambedkar Veedhi,

Bangalore – 560 001

080-22210994, 9449863459
Jaipur Transport Department

Parivahan Bhawan, Sahkar Marg,

Jaipur-302 005

0141-2740021, 2740023, 5116111, 5108461-63
Hyderabad JTC, Hyderabad D.No.6-3-646,

Opp. Eenadu Office,

Khairtabad, Somajiguda

Hyderabad-500 082

040-24462727, 9848787505
Lucknow Transport Commissioner UP,

Tehri Kothi, MG Marg,

Lucknow – 226001

0522-2613978, 0522 – 2436445, 1800-1800-151
Agra Regional Transport Officer,

Agra, U.P. – 282002

0562- 2600793
Shimla Directorate of Transport,

Parivahan Bhawan, Cart Road,

Shimla -171004

Chandigarh Registering and Licensing Authority,

Sector 17, Chandigarh


(Source: https://blog.karconnect.com/contact-details-rto-offices-major-cities/)

In case your location is not mentioned in the above list, click on the button to find the RTO offices near you.

Transfer of insurance

The first aspect is pretty simple and straightforward. When you sell your old car you have to transfer the car’s ownership to the buyer. It is the second part which confuses many of you. Since insurance is considered to be a technical concept, many of you don’t know how to transfer the policy. If the policy is not transferred, both you and the buyer might face legal complications in case of any accident. So, here is a step-by-step guide to the transfer of car insurance policy when selling your used car.

Step 1 – Inform the insurance company and get a NCB certificate

The process to transfer insurance should start along with the process to transfer ownership. To do so, you should first inform the insurance company about your intention of selling the car and the initiation of transfer of ownership. Once the insurance company knows of the transfer of ownership, it can help you with the transfer of insurance also. Moreover, if you have any no claim bonus to your name, you can retain the bonus even though you are selling the car. To do that you should ask the insurance company to issue you a NCB retention certificate. The certificate would allow you to retain your no claim bonus and use it on another car insurance policy for your new car. To get the NCB retention certificate you would have to submit the following documents to your insurance company –

  • A letter requesting policy cancellation
  • Original policy document
  • Certificate of insurance
  • RTO Form 29 which is the form for transfer of ownership
  • RTO Form 30 which is the form for intimation or report of transfer of motor vehicle
  • Copy of the RC book containing the name of the buyer
  • Proof that the car was delivered to the buyer

Step 2 – Transfer the policy

After you have availed the NCB retention certificate, it’s time to get the policy transferred. To transfer the insurance policy you would need a set of documents which should be submitted to the insurance company. These include –

  • The changed and updated RC book containing the name of the new owner. If the RC book has not been updated as yet, Form 29 should be submitted
  • The policy document
  • No Objection Certificate (NOC) from you (the seller)
  • New policy application form
  • Inspection report of the vehicle which would be conducted by the insurance company
  • The difference between the actual premium and the premium paid after factoring in no claim bonus

These two steps would get your car insurance policy transferred to the new buyer.

Points to remember when transferring insurance

When you are transferring the insurance policy, here are some important points which you should remember –

  • The buyer is mandated by law to get the insurance policy transferred in his name. However, you should also share in the responsibility of transferring the policy to avoid any legal hassles which you might face.
  • Transfer of the policy should be done within 14 days of selling the car
  • For these 14 days, when the transfer is in process, the third party cover would automatically operate in the name of the buyer. However, if the transfer is not done within 14 days, the third party cover would cease to operate
  • If there is a claim when the insurance transfer is in process, the claim would not be rejected. It would be paid after the proof of transfer is provided to the insurance company.

So, bear these important points in mind on how to change the car’s ownership and transfer the car insurance policy in the name of the buyer when you sell your car second hand. If the policy is not transferred and there is an accident, you might be forced to pay the legal liabilities if you are still mentioned as the policyholder in the policy documents. So, try and get the policy transferred within the stipulated time to avoid any hassles in future.

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