New Car? Mandatory 3rd-Party Cover Costs ₹12,000 Upfront

New vehicle buyers now face a higher upfront payment because third-party motor insurance must be bought for multiple years at once. This is mandatory by law, and you have no choice but to pay it all at the time of purchase.

Here's what happened: Buyers of new private cars must pay 3 years of third-party motor insurance upfront; for two-wheelers, the mandatory period is 5 years.. This multi-year upfront requirement — directed by the Supreme Court — significantly increases the cash outflow on Day 1 of buying a vehicle.. While the third-party cover tenure is fixed by law, consumers retain the option to buy own-damage (OD) cover separately and renew it annually..

What you should do: Ask your dealer to itemise the third-party premium separately from the vehicle price so you know exactly how much you're paying and for how many years.. Compare own-damage (OD) insurance quotes from multiple IRDAI-registered insurers independently — don't accept the bundled OD policy the dealer pushes by default.. If you sell your vehicle before the third-party policy period ends, file a formal cancellation with the insurer to claim a pro-rata refund on the unused premium..

You cannot change your third-party insurer mid-term on a long-term policy, but you can buy OD cover from any insurer annually — use that freedom to save hundreds every year.

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