How to transfer your No Claim Discount (NCD) before selling your car
Congratulations! You’re selling your old car or upgrading to a new one! You have just one tiny issue: transferring your No Claim Discount (NCD) from your old car to your new one. So what is an NCD, why should you transfer it, and how do you do that?
What is an NCD?
Every car must be insured, otherwise, you cannot legally drive that car. This insurance must be renewed every year and as a “reward” for not making any insurance claims, you will be given a 25% discount on your insurance.
Read more: Car insurance in Malaysia
It only gets better from there! If you continue to not make any insurance claims, the NCD steadily increases until it reaches a maximum of 55% for private cars. So yes, you’re being rewarded for driving safely!
| Year | NCD Rate |
|---|---|
| 1 | 0% |
| 2 | 25% |
| 3 | 30% |
| 4 | 38.33% |
| 5 | 45% |
| 6+ | 55% |
At 55%, the savings on your insurance premiums are huge! But if you’re upgrading to a new car, the amount resets to 100% which will definitely hurt your wallet. So one thing you can do to avoid paying huge premiums on your insurance is to transfer the NCD from your old car to your new one. You can do it before or after you sell your old car.
Here’s an example between a Carro Certified 2016 Perodua Myvi X 1.3L and a Carro Certified 2020 Honda City V i-VTEC 1.5L .
Assuming you do not sell the old car, the difference in insurance premiums before and after transferring the NCD is RM621. That’s a lot of money that could be spent elsewhere! (New rims perhaps?) Of course, this number can go up or down depending on what car you are upgrading to!
Before you rush to transfer that NCD and sell your car, there are a few preconditions that need to be met.
Conditions to transfer an NCD
- To transfer your NCD, the owner of both the new car and the old car before you sell must be the same person. You cannot transfer the NCD from a car you own to a family member or friend.
- Both vehicles must also be of the same type. I.e. you cannot transfer the NCD from a private vehicle to a company or commercial vehicle or vice versa. NCD transfers from a car to a motorcycle are also impossible as NCD rates for motorcycles cap out at 25% while a car’s NCD rate can go up to 55%.
Once you have confirmed that you can transfer your NCD, you can move on to the next step.
Transferring the NCD
All you need to do is contact your insurance provider for your new car and get a quotation. Inform them of your intention to transfer the NCD. Provide them with the registration number of your old vehicle and the transfer will be done for you! All that is left is to pay your new insurance premium, which enjoys the NCD discount! You don’t have to wait for your insurance to expire before you do the transfer.
Once complete, your old car will no longer have an NCD, so the insurance premium balance will need to be paid off. Similarly, if you already paid the full insurance premium on your new car before transferring the NCD, you will get a refund equal to the NCD. Simple isn’t it?
If you have already sold your car, you can still transfer your NCD from your old car to your new car! All you need to do is provide the proof of sale to your insurer and they will do the transfer for you.
All in all, maintaining your NCD is an important part of owning a car. It makes your insurance payments more affordable and transferring them from an old car to a new one is financially sound and easy.
If it is still too much of a hassle, you can sell or trade-in your car at Carro! We’ll take care of everything, from the ownership transfer to delivering your new car right to your doorstep and yes, we’ll also take care of the NCD transfer!
