Guwahati: Buying a new car or a two-wheeler is slightly to get more affordable from August 1, 2020. The on-road prices for new vehicles will see a marginal reduction as a result of the Insurance Regulatory and Development Authority of India (IRDAI) withdrawing its long-term insurance package plans. The rule mandating long-term motor vehicle insurance for three or five years has been done away with, and the industry is now back to the mandatory one-year, own-damage insurance cover that is necessary when purchasing a new vehicle.
With the rollback, the customer does not have an option to purchase a long-term own-damage policy even if they wanted to. That said, new vehicle owners need to buy a comprehensive cover for one year, while third-party insurance is still mandatory for three and five years for car and two-wheelers respectively.
Nikunj Sanghi, MD, JS Four Wheel Motors and Chairman, Automotive Skills Development Council, said, "It is a positive impact in the sense that anything that makes an impact on the buying decision, specifically in the present environment, it will be looked at as positive. It was more of a pain in terms of how it needs to be followed, how will the renewal be done. Once the first year of comprehensive cover is over and you want to change the insurance company, you already have a five-year lock-in with some other insurance company. So how do you port to another insurance company? So those were bigger challenges on how it would pan out."