Zulfi bought her first car - which became a symbol of her independence and freedom. That car represented the first big step she took toward adulthood, and it was the key to unlocking a world of possibilities. Now her family has grown, so she wishes to buy a bigger car that offers a comfortable and safe ride, as well as state-of-the-art technologies to make her journeys more enjoyable. Considering this, she is ready to part with her old car. She found a potential buyer after a month-long search. Having maintained her old car well and protected it with an ideal car insurance policy, she decided to transfer the old policy to the new owner - so that it won't be wasted.

So, she approaches the insurer and asks them if it is possible to transfer the old policy to the new owner’s name. Unfortunately, they say no.

What is the reason for not being able to transfer an old policy? Let's find out.

Why Can’t You Transfer Your Old Policy To The New Owner’s Name?

It is not possible to transfer a policy from one person to another in the UAE, because of the following reasons -

●Motor insurance is not only issued for the vehicle, but for the vehicle's owner as well. In the event that the vehicle undergoes a change or there is a change in the owner's details, the insurer has the right to refuse to honour the existing contract in the name of the new owner. It is for this reason that they will always cancel the policy. the right to refuse to honour the existing contract in the name of the new owner. It is for this reason that they will always cancel the policy.

●Every time a vehicle’s ownership changes, the RTA (Road Transport Authority) will need to be notified and they will have to update their records and issue a new registration card/Mulkiya Copy. A new and updated registration card will have to be accompanied by a new insurance policy for 13 months.

●Transferring a policy is not technically possible as when the policy is transferred from one person to another, the risk profile changes. The new person may pose a larger or a smaller risk to the insurer as compared to the current policyholder, and so, the policy issued in the name of the old owner will not be suitable for the new owner.

Let’s understand this with an example

Arthur is a British national who works and owns a car in the UAE. He commutes to work by car. After his 4-year long tenure in the UAE, his company transfers him to Scotland. Arthur now wants to sell his car. Let's say he sells his car to an Emirati (delete the nationality of the buyer) Amar who does not have the same driving history, age, experience or nationality of Arthur Now, there has been a change in the risk profile as Amar may either be a higher or lower risk than Arthur for the insurance company. When the risk profile changes, the terms and conditions will undergo changes as well. Furthermore, premiums may vary depending on the nationality of the car owner.

Thus, a policy cannot be transferred from one person to another due to the aforementioned reasons. Amar will have to purchase an entirely new car insurance policy.

What Is The Process Followed When A Car Is Sold To A New Owner?

Selling your car to an individual or a secondhand dealer is your choice. When you find a suitable buyer, you need to follow these steps -

1.First, you must visit the RTA as all vehicle transfer formalities are handled by them.

2.A change in ownership requires the consent of the existing owner, and the new owner must accept and agree to purchase the car in the condition mentioned.

3.When the vehicle is transferred, the new owner must have it inspected by the RTA and pass the fitness test.

4.In addition, the new owner will need to arrange a car insurance policy for a period of 13 months from the date of transfer. This is a mandatory requirement during a transfer of ownership request to the RTA.

5. Please remember that ownership will be transferred from the old owner to the new owner only when these three documents are available, namely the fitness certificate, proof of payment, and insurance copy for 13 mon

Wrapping up!

So, we've reached the end of the article. We hope this article gives you enough information on what steps to follow if you want to sell your old car. It is imperative to take care of all the paperwork and legal formalities involved in the sale of your old car to avoid any future hassles. Also, please remember that you cannot transfer your old policy to the new owner's name because of changes in the risk profile.