If you are confused about when and what type of car you should be buying, then you should be reading this article. Learn all about car insurance when buying a new car.
Rajesh is planning to buy a car. He starts surfing about it online and messages his family and friends who have recently purchased a car. But is this the right way to start searching a car. Here are a few checklists which can ensure that Rajesh buys the right car. Buying a car is a complicated decision as it gives rise to financial obligations like payment of EMI’s, car insurance, maintenance charges, etc.
Do you need a small car or a big car?
Are you thinking of starting a family, or you are a bachelor, or you stay with your parents, accordingly helps you decide which one to buy. Though you have the privilege of depreciation being charged but in case you are a salaried individual, the interest on the car loan is not deductible.
Ideally, a new car would come down to more than half of his value in a short span of three years. Also, the depreciation could last for 5 years. An individual owns a car for a period averaging 7 years. So, the decision to buy a new car is very crucial as it will last with you for few couple of years.
What is the best time to buy a car?
Dealers have to meet their targets quarterly like at the end of March, June, September and December. So, suppose you plan to buy a new car at the start of February, so you should start enquiring about it somewhere at the end of February. At the end of the quarter is not recommended assuming in case the targets are met, the dealers might not give the best possible deals.
Which one Diesel or Petrol?
Choosing between diesel or petrol car is a difficult choice. Reasons could be:
- Fuel cost of diesel is less than petrol
- Diesel cars are more expensive than petrol
- Maintenance of diesel cars (cost of spare parts and servicing costs) are on a higher side as compared to petrol cars.
If your monthly running is more than 1500 Km, then you should prefer a diesel car otherwise go for petrol version.
In India, car insurance is compulsory for all vehicles. It helps to protect the losses one may incur in case the car is lost or damaged. You will have to pay insurance premium once every year. The premium is based on the IDV declared by the car owner. IDV is insured declared value which is the current market value of the car. The more the IDV, the more the insurance premium on the car and vice versa.
While the premium might tend to rise every year, with the No Claim Bonus option, the policyholder can avail a discount of 20%-50% on the insurance premium. No claim bonus is a reward to the person holding the policy in case he does not claim on his policy. This bonus can be claimed at the time of renewal of policy and not at the beginning of policy. NCB discount starts at 20% and goes up to a maximum of 50% in a period of five years.
Ideally, three types of insurance cover are available in case of car insurance.
1. Third party liability coverage
As the name suggests, third party liability coverage provides cover to the third party. It provides coverage for losses, damages or injuries caused by the policyholder while he was in the driver seat. It does not cover the policy holder’s losses. This policy is mandatory for every car owner in India.
2. Comprehensive coverage
Comprehensive coverage is exclusive and includes third party liability coverage, personal accident coverage, and losses due to vandalism or theft. You can also insure other parts and accessories of car.
Most Importantly, it is always advisable to compare car insurance before buying a policy to justify the premium you pay.