used car loans

4-step guide to buy a used car in India

  • Used Car Loans

Planning to buy a second-hand car?

Doubtful if you should?

Well, go for it! Used cars are affordable, have lower depreciation, require lower insurance and come with a warranty, which makes them as good as a new one! It all depends on your selection process.

The market for used cars is massive and growing rapidly. However, the second-hand car industry is semi-organised in India, making it difficult to rely on roadside car dealers. You have to keep a thousand things in mind, viz. documents, insurance, car loan interest rate, and what not. If you do not want to be taken for a ride by car dealers or owners, it is advisable to consult someone who can help navigate you through the process.

Here are some quick tips for buying a used car:

Step1: Select your seller carefully

Before you decide on anything else, the first step is to decide from whom you want to buy the used car. Three options prevail in India: you can buy it from an individual, a broker or a franchised pre-owned dealer. If you know the seller, then the first option is undoubtedly the best! Alternatively, you could buy from a small-scale used car broker. However, make sure you negotiate the quoted price and check the car thoroughly, as they are often in hurry to close deals. Lastly, if you buy from the other players in the market, it might cost you more, but you won’t have to worry about the condition of the car. So don’t rush, think about your priorities, and decide accordingly.

Step2: Do your homework diligently

1. Select a model:

This step involves extensive research. If you’re interested in a particular make, ask a couple of owners about the pros and cons of owning it. Inquire about the running and maintenance cost so that you know its affordability in the long run. Once you have finalized a model, move to the next step.

2. Negotiate the price:

Research online and offline about the rates of the car you want to buy so that you can negotiate. However, do not forget that rates vary as per the manufacturing year, the condition of the car, and even colour.

3. Learn the features:

It is not just about money; you must also be familiar with the features of the car so that you can spot missing components and accessories while you are inspecting the car. Oh, yes that’s the next step!

Step3: Inspect the car thoroughly

Get the car inspected by a trusted mechanic so that you can get the problems fixed by the owner or negotiate before you close the deal.

    • The performance of the car depends majorly on the engine. Any engine-related damage is going to cost you more, so make sure it is working perfectly. Also, get the air, fuel, transmission, and oil filters changed.
    • Take a test drive to check the brakes. Try driving at slow and high speeds and see if there is any vibration or strange noise. Also, see if the car gets pulled in one direction.
    • Minor dents and scratches are no big deal. However, ensure that it has not met with a major accident before.
    • Take a look at the interior once and make sure steering, seats, door handles, etc. are in good condition. Check if the electric equipment like air conditioner, music system, and power windows are working fine.
    • The last, but certainly not the least, don’t forget to examine all the tires.

Step4: Do the paperwork comprehensively

The first step is to get the ownership transferred in your name. Transfer the Registration Certificate (RC) in your name and then check for other papers. Even when the RC is in your name, if the insurance isn’t, it gets nullified. So make sure you transfer the insurance policy in your name or get a new one. See if the car has had any accidents and check NCB (No Claim Bonus) - the higher the NCB, the better. Ensure there are no pending loans on the car that you are buying. Check the required forms for the same. Get all the other required documents like a valid Pollution Under Control (PUC) certificate, road tax receipt, car purchase invoice, the NOC, etc.

Bonus Tip:

Don’t forget to check for used car loan interest rate beforehand if you’re planning to take a loan to buy the car. Get your car washed and quick fixes done before the first drive so that you are all set to flaunt your smart purchase!

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