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Do you need Insurance to Test Drive a Car?

Team AckoSep 28, 2021

Taking a test drive of a new car at the dealership is ideal to understand if the car suits your requirements. Not only does it give you the peace of mind that there are no fundamental issues, but it also allows dealers to demonstrate the features and capabilities of the car. But, do you need insurance to test drive a car? 

Do you need insurance to test drive a car?

This article helps you clear doubts about insurance for a test drive car and why it is necessary to insure a new vehicle.

Is it possible to test drive a car without insurance?

To ply on Indian roads, all motor vehicles must be insured with the mandatory Third-party Liability plan. Whether a private, commercial or test-drive car, all cars must be insured against third-party liabilities. Driving an uninsured car attracts penalties and maybe even imprisonment.

Ensure you talk to the dealership about the validity of the insurance of the test drive car before you go on a spin. The Comprehensive Car Insurance policy is undoubtedly a better coverage for a motor vehicle. It covers both third-party liabilities as well as damages to the insured car. Ensure the test drive car is comprehensively insured. 

Typically, dealers buy a policy that will pay for damages to the insured car and liability claims made while a customer or an employee is driving the car.

It is wise to confirm that the test drive car carries vehicle insurance before getting behind the wheel. When test driving a car from a dealership, ask if the vehicle is insured, and if you are liable for any damages/losses that may arise due to an accident. It is advisable to test drive a car only if it has an active insurance plan to avoid unforeseen liabilities.

Can you test drive a used car without insurance?

Whether a new car or a used car, all cars should be insured, including a second-hand car. The used car should be insured with the mandatory Third-party Liability plan (TP). Test driving a second-hand car without insurance could result in some hefty traffic penalties. 

Because car insurance plans can differ, it is always a good practice to enquire about the specific coverage of the used car you’ll be test driving. Ask whether the used vehicle carries the following coverage.

Third-party liability coverage: The Third-party Car Insurance plan pays for injuries or property damage to a third party in case of an accident while test-driving a car.

Own damage coverage: Own Damage (OD) cover provides coverage for repairs or replacement of damaged parts of the used car if it is damaged in an accident while test driving the vehicle. It also covers damages or losses due to natural calamities, man-made calamities and even theft. 

Which motor insurance covers a test drive car?

If you want to test drive a new car from a dealer, you are typically covered by the vehicle dealer’s car insurance. The dealer selling the new car should take care of insuring the test drive car.

Typically, insurance for the test drive vehicle should be insured with mandatory Third-party insurance. However, the test drive car should be insured with Comprehensive insurance for holistic coverage. It covers both third-party liabilities and damage to the vehicle.

What documents do you need to test drive a car?

The only requirement for test driving a new or a used car is to have a valid Driving Licence (DL). However, the car you are test driving should be comprehensively insured so that you can be secured against an accident or liabilities arising from third-party injury or damages to their property. 

While the DL is mandatory, do you need proof of insurance to test drive a car? No, you do not require car insurance to test drive a car. Car insurance for the test drive car is typically taken care of by the dealer. When you book your test drive, make sure you check if the car carries valid insurance to drive the vehicle on Indian roads.

Things to remember

  • Dealerships must insure their test drive cars so that the vehicle is legally compliant to drive on public roads.

  • When the dealer sells the car, it is no longer the dealer’s responsibility to insure it.

  • The dealership carries both the Third-party liability and Own Damage cover that pays for damages to the test vehicle or in case of third-party liabilities that can happen during a test drive.

Frequently asked questions

Here are some of the common questions about insurance for a test drive car.

Is my existing car insurance enough to test drive a new or a used car?

No, your existing insurance for a car that you own does not cover another car. Whether a new or a used car, the test drive car should be insured with compulsory Third-party Insurance to run on public roads.

Do car dealers require insurance for their test drive cars?

Yes, all cars in India should be insured with a Third-party plan. Ideally, the dealership will insure the test drive car before offering the vehicle for a test drive.

Can the dealer hold me responsible for damages to the test drive car?

While the test drive car may be covered under a dealer’s insurance, the dealership might hold you responsible for damages to the car, especially in case of reckless driving.

Can I let someone test drive the car I am selling if I don’t have car insurance?

If you are selling an uninsured car, you should not let anyone test drive the car. You must insure your car with a Third-party Car Insurance policy so that it can be test driven on public roads. However, insuring your car with the Comprehensive Car Insurance policy lets you be at peace knowing you are covered against damages to your car caused during the test drive.

Who is responsible for damage to the car during a test drive?

For broader insurance coverage, the test drive car should be insured with the Comprehensive Car Insurance plan to mitigate losses arising from damages to the car and third-party liabilities. Ideally, the car dealer has to recover the costs by raising a car insurance claim against the policy. However, in specific cases (reckless driving), the dealer will hold the person who is testing the car.

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