Buying a Second Hand Car in Hong Kong

Check The Car Before Purchase

The first thing you should do is check the car's service history to confirm the mileage stated by the seller. An independent source can ensure this, and that the car is in good running order. The Hong Kong Automobile Association offers this service (391 Nathan Road, Yau Ma Tei, Kowloon, Tel: 3583 3628)

Certificate of Clearance

To guard against being stuck with a seller's outstanding fixed penalty tickets, and to avoid being subject to a license suspension (if the former owner failed to disclose such information), we suggest applying to the Licensing Office for the relevant Certificate of Clearance, before initialising the actual transfer. The certificate is issued free of charge, remains valid for 72 hours, and is a good way to secure the transfer goes smoothly.

Car Insurance

In Hong Kong it is mandatory to either own fully comprehensive motor insurance, or at the very least third-party insurance cover, for any person to drive a vehicle on the road. The punishment for ignoring the requirement for a compulsory third-party policy is a fine, up to 12 months in prison and a 1 to 3 year driving ban. Be aware that on the transfer of ownership, any third-party insurance policy under the name of the previous owner will no longer be in force. New owners must find suitable car insurance in their own name for the vehicle before applying for transfer of the vehicle’s ownership.

Insurance premiums are dependant on a number of factors, such as the make and model of car, engine capacity, and age amongst other details. Hong Kong also uses the No-Claims Discount (NCD) system. A 20 percent discount can be earned after one year without making any claims, which increases by 10 percent each year up to a maximum of 60 percent.

The following documents are required to secure insurance for a car:

• A copy of the Vehicle Registration Document
• Proof of identity of all drivers (Hong Kong Identity Card or passport)
• A copy of the driving licence of all drivers
• Proof of no claims discount (if applicable)

To get a free, easy and quick quote just click here or call one of our insurance experts to have them guide you through the entire process at 3113 2112.

Insurance Cover Note

Before the transfer of ownership can take place, you as a buyer need to ask for a copy of the vehicle registration document from the owner. This copy can be sent to an insurance broker to generate a quote (based on the model, engine size, etc.), and a temporary insurance cover note can be issued to you. Make sure to take this on the day of the transfer, as it is a required document to finalise the Notice of Transfer, and you will be covered to drive your recently purchased car home.

Notice of Transfer

Both the buyer and seller need to have signed and duly completed TD 25 forms (and here), as proof that the transferor and transferee agree to the transaction (who must also both declare the transaction price of car on the form). This is the Hong Kong Transport Department's Notice of Transfer of Ownership of a Vehicle form, and both an original from the new owner and a duplicate signed by the previous owner must be physically handed by both persons to a Licensing office within 72 hours of a change of ownership, along with these necessary documents:

• Vehicle Registration Document (the original document signed by the registered owner)
• Proof of identity (Passport or HKID no.)
• Proof of insurance (Insurance Cover Note)
• The appropriate fee

Since the seller is required to submit their signed duplicate copy of the original form to a Licensing Office, we recommend completing the process together at the same time, to make sure potential complications (such as unpaid fees) can be avoided. A former owner should not hand over the original vehicle registration document to the new owner until the Transport Department has registered the transfer.

Arrange to go with the seller to one of the Hong Kong Licensing Offices

• Hong Kong Licensing Office - 3/F, United Centre, 95 Queensway, Hong Kong
• Kowloon Licensing Office -  2/F, Cheung Sha Wan Government Offices, 303 Cheung Sha Wan Road, Kowloon
• Licensing Office - 5/F, Kowloon East Government Office, 12 Lei Yue Mun Road, Kowloon
• Sha Tin Licensing Office - 2/F, Sha Tin Government Offices, 1 Sheung Wo Che Road, Sha Tin, New Territories

Approved Transfer of Ownership

Submitting the Notice of Transfer does not mean that the transfer of ownership of a vehicle is complete. It will be approved when the vehicle registration document is issued to the new registered owner, and is specified with an effective date of transfer of ownership.

If you are considering buying a second-hand vehicle, contact the experts at Kwiksure today. We can help ensure you have coverage in place before you buy your vehicle.