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If you're planning to buy a new car or a bike, then get ready to pay more. Yes, the prices of the four-wheelers and two-wheelers will go up from September 1, 2018. The prices will be increased as the long-term third-party insurance is mandatory for all new cars and bikes from September 1. 2018.
IRDA (Insurance Regulatory and Development Authority) has made the long-term third-party insurance compulsory for all new four-wheelers and two-wheelers as per an order from Supreme Court. So, with the addition of the cost of long-term insurance, the overall price of the cars and bikes will go up.
As per the new rule, all insurance companies should only offer a three-year Motor Third-Party Insurance for new cars and five-year insurance policy for two-wheelers. At present, there are two types of policies in the motor segment: Third-Party policy and Package Insurance Policy.
With the new rules, the third-party insurance for cars under 1,000cc engine will cost Rs 5,286, insurance for cars between 1000-1500cc engine will cost 9,534 and for cars with the engine capacity above 1,500cc will cost a hefty amount of 24,305 for the three-year insurance.
On the other hand, the five-year third-party insurance for two-wheelers below 75cc engine will cost Rs 1,045, for two-wheelers between 75-150c engine will cost Rs 3,285, for bikes between 150-350cc will cost Rs 5,453 and the bikes above 350cc engine capacity will come with an insurance policy that costs Rs 13,034.
But when it comes to comprehensive insurance, the four-wheeler buyers have an option of choosing between a one-year or three-year policy. But the two-wheeler buyers have to purchase a five-year comprehensive insurance policy.
Thoughts On The Car And Bike Price Hike
Implementing the mandatory insurance rule is good for the customer, as the vehicle and the owner will be covered in case of any mishaps. But the insurance will also increase the price of cars and bikes which might be a problem for manufacturers and dealers. But we do not expect the sales of the cars and bikes to drop because of the new insurance rule.