When buying a used car, make sure you have the right car insurance policy in place. This guide outlines the steps you need to take to buy the best insurance policy for your secondhand car.

Insurance Coverage for secondhand cars in UAE

Buying a new car in the UAE can be an intimidating experience for first-time drivers due to the expense involved. Secondhand cars are a much cheaper alternative to buying a new car, especially if you’ve just started working in Dubai. Unquestionably, a new car is much more convenient, but it can occasionally be out of your price range. For this reason, many individuals choose to buy used or pre-owned cars in Dubai.

Quick Read Section

• Buying a used car in the UAE is more affordable than buying a new one, but it's crucial to make sure that it's protected by a comprehensive insurance policy.
• To purchase a used car in Dubai, you must locate reputable car dealers with good reviews, transfer ownership of the vehicle, and complete the RTA's Registration Transfer Process.
• The two types of car insurance coverage available in the UAE for used cars are Third-Party Car Insurance and Comprehensive Car Insurance.
• The two most crucial requirements for transferring car insurance from a previous owner are that the policy must have at least nine months left on its term, and the insurance provider must allow policy transfers between owners.

Read on to know the process behind insuring a secondhand car in UAE and the cost to transfer ownership and insurance from the previous owner of your used car.

What is the process to buy a second-hand car in Dubai?

Buying a used car is just like buying any other product. You need to follow several steps that include researching, comparing prices and selecting the final product. Follow these steps to buy used cars in UAE:

1.     Pick a few car brands and models that suit your budget:

Do thorough research of your preferred car brands and models based on the maintenance costs, resale value, availability of repair services, performance and capacity of the vehicle.

2.     Find authentic car dealers with good ratings:

Search for car dealers who are credible and are known for their service in the used car industry. Compare and negotiate various prices before deciding on one.

3.     Transfer ownership of the used car:

Once you have selected the secondhand car model and the car dealer you wish to buy it from, the next step is to transfer ownership of the used vehicle. This involves contacting the previous owner of the vehicle via the dealer and includes the following steps.

4.     Ensure clearance of pending fines or loan payments:

This is a necessary step to ensure that the previous owner of the vehicle has paid all due fines and loan payments before passing on the vehicle to you. Make sure to verify the completion of payments and obtain proof to avoid future complications.

5.     Complete RTA’s Registration Transfer Process:

Visit your nearest RTA office to initiate the registration transfer process for your second-hand vehicle. The car will be thoroughly inspected for any damage and functioning of parts. The registration documents of the vehicle will be checked, and you will receive a test clearance certificate. This document along with your forms, passport copies, driving license, and insurance policy should be handed over. Once this is processed, you will receive a new registration card, and a new license plate for your used vehicle.

How to get insurance for a second-hand car in UAE?

Your secondhand vehicle can be insured under two types of car insurance coverage available in the UAE:

• Third-Party Car Insurance for used cars:

This type of insurance coverage protects you from liabilities due to property damage and injury to third parties. It is the most basic level of car insurance coverage that all car insurance policies must offer. In the event that the insured is at fault for an accident, it covers all third-party obligations, car damage, injuries, and medical costs incurred by a third party. However, third-party insurance does not cover your own vehicle or injuries inflicted upon yourself.

• Comprehensive Car Insurance for used cars:

This type of insurance coverage protects you against accidental damage and third-party liabilities in the event of a collision. Unlike third-party car insurance, comprehensive car insurance does not only cover damage and injuries caused to a third party but covers damages sustained by the policyholder as well. Coverage under comprehensive car insurance includes third-party liabilities due to damage/injury, personal accident cover as well as damage due to natural or man-made disasters.

Which insurance coverage to choose for my used car?

The kind of car insurance coverage you choose for your second-hand car, whether it is comprehensive or third-party car insurance depends on the model year and how long you wish to drive it. Car models that are quite new can be insured under a comprehensive car insurance policy as the vehicle is still in good condition and will not require a lot of repairs. A comprehensive plan with minimal inclusions is recommended for used cars that have been through a lot of wear and tear, as they are at risk of damage due to collisions.

How to transfer car insurance for used cars from the previous owner?

The existing insurance policy under which the used car is covered can be transferred to the new owner, provided that it meets certain conditions such as:

• The current existing insurance policy must have at least 9 or more months remaining on its tenure.
• The car insurance company under which the used car is insured must have the option of transferring insurance policies between owners. Reach out to your insurance broker to check if this facility exists for your insurance plan. You can also check if you can cancel your policy and get a refund if the plan is non-transferrable.

You should also note that the No-Claim Bonus earned by the previous owner of your used car cannot be transferred to you with the transfer of the insurance policy.

There is no set fee stipulated by the government regarding the transfer of car insurance with used vehicles. However, there can be a fee charge set by your insurance company which you should check and confirm with your insurance broker.

Steps you need to follow to transfer your car insurance policy to the new owner:

1. Obtain proof of ownership of the second-hand vehicle to initiate the transfer of insurance. The change of ownership must be registered with the Road and Transport Authority in UAE. The process of transfer of ownership typically costs between AED 300 and AED 800, depending on the type and size of vehicle.

2. Get in touch with the previous owner and the insurance provider or broker to inform in advance of the transfer.

3. Complete the transfer of ownership process by filling out forms and submitting the necessary documents.

4. You can choose add-ons or make other changes to maximize coverage of your insurance plan.

5. Your car insurance policy will be transferred after vehicle inspection of the condition of the vehicle.

What are the documents required for Car Insurance transfer?

You need to have these documents in order to successfully transfer the car insurance policy from the previous owner:

• NOC or No Objection certification from the previous owner
• Proof of current car insurance policy
• Car Insurance Transfer application form filled with details
• Proof of vehicle ownership of current owner
• Original car registration documents of the used vehicle
• RTA Inspection Report

How much does it cost to insure a used car?

The cost for insuring a used car is subject to several factors such as the age of the driver, the model year of the car, driving history, past claims, and vehicle category.

If the car insurance policy of the previous owner is non-transferable, then you need to purchase new insurance coverage for your used car.

Opt for comprehensive plans as they offer more protection and maximum benefits to the driver than third-party insurance plans with lower premiums. Make sure to enquire the terms and conditions with the help of your insurance broker before issuing your insurance policy.

Tips to Buy Insurance for Used Cars in UAE

These pointers will prove handy while you purchase insurance for a used car:

• Always purchase your used car from a reputable dealer. If you know and believe the vendor to be genuine, you can also purchase the car directly from them.
• Get a trustworthy expert technician to give the used car a full inspection. Used vehicles need to be examined thoroughly.
• Contact the previous owner’s insurance broker or provider to find out the vehicle’s claim history.
• Consider the mileage of the car as well. Cars that are driven less often get additional discounts on insurance plans.
• Make a firm decision to buy the car only when you have checked it thoroughly in person. Do not rely entirely on images.
• Check the age of the car as models over seven years old will be challenging or expensive to insure.
• Spend money on a pre-purchase inspection so that a technical expert can inspect for damage and any malfunctions under the hood.
• Select an insurance plan that offer comprehensive coverage with garage repair services and add-ons.

Purchasing a used vehicle is a more cost-effective option than buying a brand-new vehicle in UAE. You can choose from a variety of models, based on the price range and specifications you are looking for. However, the most crucial thing to purchasing a secondhand car in UAE is to make sure that it is covered under a comprehensive insurance plan to protect you from financial expenses and liabilities. Use the above-mentioned tips to buy the right insurance coverage for your used car and drive without worries.

Contact us today for all your used car insurance needs!