Does vehicle insurance transfer with the vehicle during ownership transfer?
3 Answers
Vehicle insurance does transfer with the vehicle during ownership transfer, but this is not mandatory. Documents required from the original owner for a used car transfer include: the vehicle registration certificate, driving license, and ID card, among others. The buyer needs to provide an ID card, and if they are from another region, a residence permit or temporary residence permit is required. The original owner's commercial insurance can be canceled (compulsory insurance cannot be canceled), or the insurance can be transferred to the buyer at the insurance company. Precautions when buying a used car: Incomplete documentation. Complete documentation for a used car includes: the vehicle registration certificate (or original purchase invoice), driving license, vehicle purchase tax payment certificate, road maintenance fee records, and compulsory insurance, among others. Missing vehicle registration certificates or driving licenses, or unpaid compulsory insurance and road maintenance fees, can cause endless trouble for the buyer. Therefore, if the seller cannot provide complete documentation, consumers should be particularly cautious. Tampering with the odometer. Most consumers rely on the odometer to judge a car's condition, and sellers often take advantage of this by tampering with the odometer. In fact, the odometer is not just an indicator of usage intensity but also a record of maintenance and replacement of other vehicle components. If buyers follow the tampered odometer readings for maintenance, it can lead to a series of potential safety hazards. New paint covering 'external injuries'. When purchasing a used car, if the car has been repainted and there are signs of repair around the front, rear, and A, B, and C pillars, the car may have been involved in a major accident. 'Tuning the heart' to raise the price. Many consumers focus too much on the car's 'heart' (engine) and overlook the health of the body. Used car sellers take advantage of this by replacing engine components to make the 'heart' appear younger, thereby increasing the price.
Last time when I helped a friend with the vehicle transfer, I learned that the insurance doesn’t automatically transfer with the vehicle. The insurance remains under the original owner’s name, and once the vehicle is transferred, that policy becomes invalid. The new owner must proactively contact the insurance company to either get a new policy or transfer the existing one. When I first bought a car, I was also confused and thought the transfer was all that was needed—almost got fined as a result. Everyone, remember to handle the insurance immediately after the transfer. Otherwise, if the new car gets into an accident on the road, the insurance company won’t cover it, and you might easily get fined by traffic police. It’s best to check the original insurance details before the transfer—some places require proof of insurance to complete the license plate transfer. This is crucial, don’t slack off or delay!
From a regulatory perspective, vehicle transfer and insurance are two separate matters. The transfer of vehicle ownership does not affect the original insurance agreement. The new owner must either purchase new insurance or apply for a transfer modification. I learned this the hard way: once I failed to update the insurance promptly after a vehicle transfer and ended up being fined. The law requires compulsory traffic insurance to cover the new vehicle; otherwise, driving without coverage is illegal. It's advisable to discuss insurance transition during the transaction to prevent the new owner from driving uninsured on the day of purchase. This can avoid disputes later. In short, insurance does not transfer automatically; proactive steps are necessary to protect your rights.
