4 things to check before buying a second hand car

Purchasing a used car is a sensible option if you are a new driver or have budget constraints. With new vehicles losing value the moment they roll out of the showroom, you can save big money even by going for a car that’s just a few months old. For other people, purchasing a used car opens doors to multiple options to suit a limited budget. The pre-owned car sector has become massive and organized now. Banks offer attractive loans, and many retailers even give out warranties on the used cars they sell, enabling customers to buy a car with more ease and confidence than ever before. That said, there’s always a lingering doubt about committing money to someone else’s old, possibly abused car. We have curated an elaborate list of all the things you need to watch out for before making your pre-owned car purchase.

The budget

Decide firmly on the amount of money you want to spend on the car. Sales personnel and brokers are smooth talkers who have their commissions at stake and are trained to sway buyers to make purchases above their means. It is up to you to be vigilant, remain grounded during the purchase, and take everything told to you with a pinch of salt. If you plan to opt for a car loan, know that interest rates for used car loans are usually higher than those for a new car. Go for short-term loans with lower interest rates. Check with your bank for loan options. IDFC FIRST Bank offers used car loans at competitive interest rates of 12.99% with a loan value of up to 90%. Other benefits include instant online approval, car valuation, and zero processing fees.

Where to buy from

You can buy a used car from an individual seller, a broker, or a franchised pre-owned car purchase company.

The individual seller model is undoubtedly the most straightforward choice if the seller is known to you. There’s no mediator to make extra money out of the transaction, thus providing you with more leeway to fix a reasonable price. Websites and used car classifieds in newspapers are also a quick way of contacting private sellers. Be prepared to do a fair bit of running around for the vehicle transfer, though.

Small-time pre-owned car sellers are another option. They are happy to close a deal fast and are known to act high-handed once a deal goes through. Be sure to thoroughly go through all details before signing off on any papers, as brokers seldom entertain any comebacks.

A franchised pre-owned car purchase company is the costliest option for a used car. However, the premium you pay also buys you various benefits like peace of mind about the vehicle’s condition, additional service packages, and warranties. The transparent buying experience and paperwork make this a largely hassle-free transaction.

Checking the car

Conduct a rigorous check once you have zeroed in on the car you want to purchase. An experienced mechanic will point out if there was a cover-up regarding the exterior and if the engine, along with the other parts, is worth the price. The older the car, the more likely it is to have niggling problems and a scarcity of spare parts. Inspect the interiors, framing, tires, and mileage thoroughly. Test-drive the car on various roads like highways, narrow streets, U-turns, etc., to gain other insights related to its performance, suspension, and manoeuvrability.

Transfer of documents

Verify the original registration certificate of the car for information on the owner’s name and details like engine number, chassis number, etc. The certificate will also specify any modifications to the engine’s displacement or changes in the colour of the vehicle. You will have to follow the rules and regulations laid down by the RTO in your area to get the registration transferred to your name. You can skip the above process if you buy from a broker or a used-car franchise company as they handle the entire transfer of ownership process for you.

While buying a second-hand car, it is the buyer’s responsibility to transfer the vehicle’s insurance to their own name. There are chances of legal issues if the car insurance is not transferred and the car is involved in an accident or other unforeseen events. The original purchase invoice, pollution certificate, maintenance records, and road tax receipt are other essential documents that must be checked while making a pre-owned car purchase. If the owner had bought the car on loan, form 35 and the financing company’s no-objection certificate are crucial.

Another critical point you must consider while buying a second-hand car is getting a FASTag. FIRSTForward, the FASTag offered by IDFC FIRST Bank, can more than ease your travels with your second-hand car.

The No Claim Bonus is a reward for not filing any claims during the policy period. Such a bonus can fetch you a discount while renewing your car’s comprehensive insurance policy. Transfer of No Claim Bonus cannot take place from a seller to a buyer, but only from the owner’s old car to the same owner’s new car.

Buying a used car can seem complicated. Do your research and follow the above steps diligently to be rewarded with a great vehicle that suits your needs and budget.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.