Purchasing a pre-owned car in India may be a clever way to save money, but it comes with its own set of risks and challenges. To begin with, there is the cumbersome task of having to change the ownership. This task entails making rounds to the road transport office and signing on a bunch of documents before the car gets transferred in your name. It does not end there; there are some more factors you need to consider before sealing the deal.
This article focuses on six things to check before buying a second-hand car to help you make the deal smoother and quicker. Apart from this, you also need a car insurance to secure your car from unforeseen events. The steps will help you secure the finest possible arrangement and steer clear of any unwelcome or unexpected situations. By taking the time to examine this used car buying checklist, you can make a wise choice and enjoy your new ride with confidence.
Things to Consider
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Budget and financing
The initial factor in your checklist is the sum you need to set aside for a used car. Consider the initial cost and subsequent expenses such as maintenance, insurance, and fuel. A vehicle with a damaged engine will likely offer poor mileage. This will strain your finances as you will need to refuel frequently. Furthermore, when purchasing a car over five years old, the insurance premium calculated will be based on the Insured Declared Value (IDV). In the event of repair requirements from damage, you may find yourself bearing the additional costs despite having coverage.
Now, let us shift focus to the financing aspect. Nowadays, financial institutions readily provide funds for buying a used car. However, you could encounter challenges when financing older cars (those over five years old). This is because, in the event of a default, the lender can face difficulties auctioning it to recover the loss.
When you search for a used-car lending institution, review each potential lender's rates, tenure, and eligibility criteria. You can use an eligibility check calculator to get a rough idea of your qualifications. Additionally, you can use an EMI calculator to determine how much you can afford through a loan.
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Research and comparison
The next aspect to consider before buying a used car is the type, model, and brand of the used car you are interested in buying. Research the vehicle's features, specifications, performance, and market value and assess whether they align with your preferences and needs. Further, evaluate fuel efficiency, safety, comfort, and resale value.
You can seek assistance from used car aggregators to review and compare various models on a single web page. Additionally, examine customer reviews and read testimonials. Opt for the model that has received the most positive feedback.
India’s car market has a number of used-car aggregators who are pretty trustworthy. Most operate to ensure car ownership is accessible and convenient for everyone. They are committed to providing customers with the best of experiences, empowering them to fulfil their dream of owning a vehicle with ease and satisfaction.
With this noble objective in mind, leading used-car aggregators in the country offer their customers attractive interest rates, zero down payment, and flexible repayment options. Moreover, they keep a strong inventory of vehicles, providing customers with plenty of options to compare vehicle models that fall within their budget. Indeed, used-car aggregators have revolutionised this segment of India’s vehicle market.
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Inspection and verification
The third aspect to consider is the physical condition and history of the used car that has piqued your interest. Conducting a comprehensive vehicle inspection for any indications of damage, rust, wear and tear, or modifications is crucial. Further, assess the engine, transmission, suspension, brakes, tyres, lights, and electrical systems for potential issues or faults.
Take a look at the odometer, as its reading can be helpful in negotiations with the seller. However, not all car buyers are automotive experts. Taking along an expert mechanic to the used car showroom is a smart move. They can assist you in evaluating the technical details associated with the shortlisted used vehicle.
Once you are done with the inspection, the next thing is to consider the documents before buying a used car. The important documents include the Certificate of Registration, insurance papers, service record book, road tax receipt, and pollution check details. The RC provides information regarding the legitimacy of the seller and the vehicle's original owner. The service record book and insurance papers provide details about the reasons for the car's visits to the service centre and any instances that prompted the need to file a claim.
Be sure to request the road tax receipt, as this will help you evade potential issues arising from unpaid taxes in the future.
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Test drive and negotiation
Test driving and negotiating are essential steps before buying a used car because they help you decide wisely and get the best deal.
First, test driving lets you experience how the car feels on the road. It helps you check whether the car's engine is working smoothly, if the brakes are working well, and whether the steering is easy to control. You can also check whether the seats are comfortable and if there are any strange noises when the car is moving. Test driving helps you find out if the car suits your driving style and whehter you feel comfortable driving the vehicle.
Negotiating is crucial as it can save you money. When you negotiate, you talk to the seller about the price of the car. You can ask for a fair price if you have researched and know the car's value.
Sometimes, sellers might agree to lower the price or offer extra things with the car. Negotiating can help you get a better deal and not spend more money than necessary.
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Warranty and insurance
The warranty of a vehicle is akin to a promise from the seller or the car company that they will fix certain problems with the car within a specific time. The warranty can cover the cost of repairs if anything goes wrong with the car shortly after buying it.
Meanwhile, insurance is like a safety net for the car and the driver. It helps cover the costs if the car gets damaged in an accident or if something terrible happens, like damage following a natural calamity, theft, or fire. Without insurance, you will have to pay a lot from your own pocket if something goes wrong. Vehicle insurance are of two types: first party and third party insurance.
First party insurance is not mandatory but it is strongly recommended as this insurance type provides coverage to your car from damage as well as from third-party liabilities. It offers all-round protection to the insured car, relieving you from any financial duress.
Meanwhile, third-party insurance is mandatory in vehicle insurance policy as it provides coverage to third-party financial and legal liabilities that can arise from an accident caused by an insured vehicle. Third-party insurance offers compensation in the event of injury to the third party or even death, including damages to third party property. Hence, securing proper vehicle insurance is applicable when buying a used car too.
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Legal formalities and delivery
Lastly, consider the legal formalities and delivery process when buying a used car. Ensure that all the necessary documents are in order and signed by both parties before initiating your payment. Obtain a receipt or invoice from the seller that mentions the details of the transaction and the car.
Transfer the car's ownership in your name by submitting an application form and copies of the required documents to your local RTO office within 30 days of buying the car. You should also update your insurance policy with your details as the car's new owner. Finally, take delivery of your second-hand car from the seller after verifying its condition and accessories.
These are among the essential factors you should consider before buying a used car in India. These steps ensure you enjoy your new ride without any hassle or regret.
Frequently Asked Questions
Q1. What should I check before buying a used car?
Before buying a used car, examining its overall condition for damage, rust, or wear is extremely important. To confirm its roadworthiness, go thoroughly through its documents that include the Certificate of Registration, insurance policy, taxation, and pollution emittance. It is helpful to take a mechanic along to help with the technical aspects. This way, you can ensure you make a wise decision and get a car in good shape.
Q2. How much insurance do I need for my used car?
You should consider a comprehensive policy (also called third party insurance) when obtaining insurance for your used car in India. This type of insurance covers various situations, such as accidents, theft, and damage. It is always a good idea to be adequately covered to protect your car and yourself in the event of anything untoward.
Disclaimer: The information provided in this blog is for educational and informational purposes only. It may contain outdated data and information regarding the Insurance industry and products. It is advised to verify the currency and relevance of the data and information before taking any major steps. ICICI Lombard is not liable for any inaccuracies or consequences resulting from the use of this outdated information.
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