BUYING A NEW CAR MADE EASY & AFFORDABLE, W.E.F. 1ST AUG, 2020
Comprehensive insurance policy will now be mandatory only for a one year plan on new vehicles.
Third-party insurance plans will still be mandatory for a 3 or 5-year plan.
This will help to bring down the on-road prices and it will be brought into action from the 1st of August.
Starting from the 1st of August 2020, buying a new car will get slightly affordable as IRDAI will be taking down the long-term insurance package plan. Hence the on-road price on new vehicles will see a marginal reduction.
Insurance Regulatory and Development Authority of India had brought in the rule for mandatory long term vehicle insurance rule ranging for three or five years back in 2018. This decision was taken in accordance with a ruling from the Supreme Court for making roads safer for motorists and pedestrians. However, this caused a sudden hike in on-road prices on new vehicles which contributed to the slowdown in sales as well.
Now the notice has been revoked, according to the new notice, it will now be necessary to take a comprehensive insurance cover for one year only. That being said, if you’re buying a new car and wishing to opt for a comprehensive insurance cover, it will be mandatory for one year plan only. Whereas, if you’re opting for a third party insurance cover, it will still be mandatory to take the long term 3-year plan.
With this, the on-road prices for new vehicles with a comprehensive insurance plan will witness a slight reduction. However, customers who were looking in for third party insurance cover won’t witness any reduction in prices. The withdrawal of long-term insurance packages could witness an increase in demand for new vehicles.
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