Considering modern cars are made to last for a long time, buying a used car can be a very smart decision. However, it can be a rather intimidating experience for both, buyers as well as sellers. This iswhere the following checklist can simplify matters, reduce risk, and convert the transaction into a hassle-free affair.
Before it comes to the process of buying a second hand car, the challenge is selecting the car you need to buy.
When you are buying a second hand car, it is possible to get swayed very easily. For example, when you go to a dealership you might see a 7-year-old Honda City for 6 Lakhs and standing next to it you’ll see a 4-year-old Toyota Camry (which is a far more premium car) for 7 lakhs. You might convince yourself to spend that extra 1 lakh and pick up a Camry but the cost of running and maintaining a Camry is far higher than that of Honda City. In the long run, you’ll end up spending a lot more money out of your pocket.
Now let’s get to what you have to keep in mind when buying a second hand car.
Despite being a used car, the vehicle you are considering should be in good running condition, and must be good value for money. Take the vehicle for a test drive and get all major systems such as engine, cooling, transmission, wheels, etc. checked by a trusted mechanic. These checks will help you ascertain whether the car is as well-maintained as the seller claims. Further, you can plan for unavoidable repairs and maintenance and include the same in your budget.
Tip: Ensure that you carry out a thorough check when you go to take the delivery of your vehicle as well. This is important because a dealer might replace some of the components from your seeing of the vehicle to the delivery of the vehicle- for example- he might replace new tyres with old tyres.
Is the seller the real owner of the car? Is this the first or the second time it is being resold? The Owner Serial Number in the RC book or smart card indicates the number of times the car has been sold till date. Has the owner paid all dues, including road tax? Ensure the seller provides you with other papers that need to be verified, including the original invoice, NOC from the car loan provider, and road tax receipt.
The car’s transfer is effected when you and the seller sign on RTO Forms 29 and 30. Further, the seller must submit Form 28, which is the NOC for transfer of the car.
Check the car’s insured value in the policy
It will be a useful benchmark during price negotiations.
Track the No Claim Bonuses over the past 2-3 years.
Frequent claims may imply frequent accidents requiring repair and maintenance to the vehicle.
Transfer the seller’s car insurance policy in your name or buy a new policy within 14 days of the date of transfer of the car.
Not doing so may lead to your insurance claim being rejected in case of any accident or mishap. Only claims related to third parties will be approved under the deemed insurance policy transfer of the law.
Can you convert the car into a dual-fuel automobile? Can you opt for upgrades for greater comfort, safety, and value? Older vehicles may come cheap but may be impossible to upgrade. A relatively new model is preferable, especially if it comes at an affordable price.
Add proportional premium paid on insurance policy to the car’s purchase price.
If paid the premium for one year and are selling the car after six months, then you certainly can ask the buyer to pay his share of the premium.
Obtain NCB retention letter from the insurance company.
The NCB cannot be transferred even if you are transferring the policy. You can retain it and enjoy its benefit when buying a new car insurance policy. Cancel the insurance policy by submitting the following documents:
If you are selling your old car and buying a used car, then you must submit these additional documents:
Proof of delivery of your old car to the new owner.
Make sure the insurance company is kept informed about the sale. The last thing you want is for your policy to pay for accidents or repairs after the car has been sold.
Don’t finalise your car’s sale on the basis of an oral agreement. Have a written contract detailing the condition of the car, the sale price, and the effective date of transfer of ownership to the buyer, along with registration and insurance details.
Irrespective of possession, legal ownership is determined by the car’s registration papers. Make sure all formalities are completed at the earliest once the sale has been concluded. This can prove very helpful in case of future disputes.
Having detailed records of repairs and maintenance performed on the car can help you negotiate a better price. Not only will you come across as a very responsible owner, the records will prove that your car was indeed maintained properly at all times.
Do your homework well, make use of online and offline resources and service providers, and rely on plain common sense to strike the right deal when buying or selling a used car.
"Be the CEO of your life"- Robin S. Sharma -
QUOTE OF THE DAY
If you’ve just bought a new car or are thinking of getting one, there are some important formalities you must complete.
Choosing the perfect car insurance policy is an important decision every car owner must make based on detailed research. Here’s how to go about it.
Beyond popular opinion, here is a list of questions you must ask before deciding to purchase a motor bike or scooter in India.
Before you buy a car insurance policy, it’s important to know exactly how its premium is calculated. Understanding the IDV is the first step in doing so.
One of the 7 major car insurance riders every car owner must know, is the Zero Depreciation Cover which can ensure you receive higher compensation in case of damage
ODP insures your vehicles against losses caused by events outside of your control. This includes natural disasters like earthquakes and tornadoes, as well as man-made calamities like fires and explosions.