Sold Your Old Car? Don't Lose Your 50% Discount! How to Transfer 'No Claim Bonus' to Your New Car

Congratulations! You just sold your old Swift and upgraded to a shiny new Creta. You transferred the RC (Registration Certificate) and the insurance to the new owner. Then, you bought a new insurance policy for your new car and paid the full premium.

You just made a huge financial mistake.

In India, the No Claim Bonus (NCB) belongs to the driver, not the car. If you had a 50% NCB on your old car, you could have transferred that discount to your new luxury car, saving you ₹15,000 or more. Here is how to claim what is rightfully yours in 2026.

How to Transfer 'No Claim Bonus' to Your New Car

1. The Golden Rule: NCB Follows You

Many car owners think, "I sold the car, so the insurance goes with it." While the third-party liability coverage must legally transfer to the new owner, the NCB (the reward for your safe driving) stays with you.

Even if you switch insurers (e.g., moving from ICICI Lombard to HDFC Ergo), the NCB is valid across all General Insurance companies in India. It is your portable asset.

2. How Much Can You Save? (The Math)

Let's say you have driven safely for 5 years and earned the maximum 50% NCB.

   
• Scenario A (You do nothing): You buy insurance for your new SUV. Own Damage Premium is ₹30,000. You pay ₹30,000.
   
• Scenario B (NCB Transfer): You transfer your 50% NCB. You get a ₹15,000 discount. You pay only ₹15,000.

That is massive savings for filling out one simple request form.

3. The Process: How to Get the "NCB Retention Letter"

You cannot just tell the new insurer, "Trust me." You need a certificate. Here is the 2026 workflow:

   
1. Step 1: Sell the Old Car. Ensure the transfer forms (Form 29/30) are signed and submitted to the RTO.
   
2. Step 2: Request "NCB Retention Letter". Contact your old insurer. They will require proof of sale (Sale Deed) and increasingly, a copy of the Transferred RC (showing the new owner's name) or Vahan portal status.
   
3. Step 3: Issue of Letter. The insurer will "freeze" your NCB in a letter valid for 3 years. (Note: The policy on the old car continues for the buyer, but with 0% NCB).
   
4. Step 4: Buy New Policy. Submit this letter to your new insurer to claim the discount instantly.

4. "I Already Bought New Insurance!" (The Refund Trick)

Did you read this article too late? Don't worry. You can still save money.

If you have already paid the full premium for your new car, obtain the NCB Retention Letter from your old insurer and submit it to your new insurer. They are obligated to endorse the policy and refund the excess premium amount to your bank account. It is not too late!

Your Driving Asset

Your safe driving record is a financial asset. Don't donate it to the person buying your second-hand car.

The NCB Retention Letter is valid for 3 years. Even if you don't buy a new car immediately, secure the letter now. Before you hand over the keys, call your insurer and say: "I want to retain my NCB." It takes 10 minutes and saves you thousands.

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Disclaimer: NCB applies only to the 'Own Damage' component of the premium, not Third-Party liability. Rules are subject to IRDAI regulations.