BusinessFive years of bumper-to-bumper insurance is not required; Car prices will...

Five years of bumper-to-bumper insurance is not required; Car prices will go down


  • The price will be reduced by Rs 50,000 to Rs 2 lakh
  • The final decision must come from Parliament
  • The requirement to waive the five-year insurance term

A golden opportunity for those looking to buy a new car. The Madras High Court has ruled that bumper-to-bumper insurance is no longer required for the purchase of new cars for five years. The court’s ruling came after hearing arguments from insurance companies, auto companies and the Association of Insurance Agents. This will greatly reduce the cost of new vehicles. It is estimated that the prices of various models will be reduced by Rs 50,000 to Rs 2 lakh. Two weeks ago, the Madras High Court had ruled that bumper-to-bumper insurance was mandatory for new cars from September 1. The court overturned the verdict.

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The government had made five years of insurance mandatory for new vehicles. Most companies offer bumper-to-bumper insurance for cars. This led to a surge in vehicle prices. It was only after five years that the owners were able to change the insurance. Despite the new order of the Madras Court, the final decision in this matter is up to the Parliament. There has been a strong demand for the withdrawal of the five-year insurance policy. This condition was due to the increase in vehicle prices. In addition, customers lost the opportunity to change insurance providers if needed. The no claim bonus also became irrelevant with five years of insurance.

The bumper-to-bumper insurance requirement also adversely affected vehicle sales. Due to the shortage of raw materials and chips, most of the auto companies in the country have recently increased the prices of various models. According to sources, prices are likely to rise further. Meanwhile, the assessment is that the reduction in insurance rates will revive vehicle sales. The daily rise in fuel prices in the country is also a setback for fuel vehicles. The court ruling has also affected the share prices of auto and insurance companies.


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