How to buy a used car in India?

Purchasing the dream car is a milestone for many. Now, we often deal with budget constraints and unforeseen expenses. In such cases, buying a used car becomes the best option. Buying a used car not only lets you get your favourite car without compromises but is also cost-effective and reliable. However, the biggest issue used car buyers face is where to begin and what steps to follow for getting the best deal.  Read on to explore the comprehensive guide on how to buy a used car. This guide provides you with valuable insights and a roadmap to ensure a smooth and satisfying experience.

Why should you buy a used car?
 

The decision to buy a used car in India is often influenced by a combination of financial understanding and practicality. Listed below are some reasons that make choosing a pre-owned vehicle a wise decision:

• Cost savings

The most apparent advantage of buying a second-hand car is the significant cost savings it offers. Used cars come with a considerably lower price tag compared to their brand-new counterparts. It allows you to enjoy the perks of car ownership without the burden of a hefty initial investment.

• Depreciation concerns

New cars undergo rapid depreciation in their initial years. By purchasing a used car, particularly one that is a few years old, buyers sidestep the steepest part of the depreciation curve. This reduces financial impact, making used cars a financially wise choice.

• Variety of choices

The used car market in India is diverse and provides an array of makes and models. It provides you with the flexibility to choose a vehicle that aligns with your preferences but also with the budget constraints. Whether you want a sleek sedan or a sturdy SUV, the used car market has something for everyone.

• Lower insurance costs

Insurance premiums for used cars are generally more affordable than their newly purchased counterparts. This factor contributes to the overall cost-effectiveness of owning a used car, making it an attractive option if you are mindful of ongoing expenses.

Certified or non-certified used car: Which one to choose?
 

One of the important decisions you need to make when entering the used car market is whether to opt for a certified or non-certified vehicle.

1.  Certified used cars
 

Certified pre-owned cars are sold through authorised dealerships and undergo a rigorous inspection and refurbishment process. Certified used cars are known for the assurance they provide – a manufacturer-backed warranty and a guarantee of the vehicle's condition. This option is particularly suitable if you seek comprehensive assurance regarding the reliability of the purchase.

2.  Non-certified used cars
 

Non-certified used cars, often available through private individuals or independent dealerships, lack formal certification. While they may not come with a manufacturer's warranty, they often present a more negotiable price. A reliable non-certified used car may even be better. However, opting for a non-certified vehicle requires an increased level of diligence on your part, particularly in terms of inspection and verification.

Ways of buying: Where and how to buy a used car?
 

Once you decide between a certified and non-certified used car, the next consideration is where and how to buy a second-hand car. Used cars in India have diverse avenues, each with its own advantages and things to consider:

• Dealerships

Reputable dealerships, whether affiliated with manufacturers or operating independently, are reliable sources for certified used cars. Dealerships provide a structured buying process, often accompanied by warranties and, in some cases, financing options. The formalised transaction can be particularly appealing if you wish to avoid research hassles.

• Online platforms

In the digital era, numerous online platforms have emerged as popular platforms for buying and selling used cars. Third party platforms and dedicated automotive portals offer a convenient and extensive array of options. Buyers can explore listings, compare prices, and connect with sellers from their homes.

• Private sellers

Buying directly from an individual seller is another way to acquire a used car. This option often provides negotiation opportunities and lower prices. However, you need to inspect the vehicle meticulously and verify the documentation.

What are the tests to do before you buy a second-hand car?
 

You require a systematic approach to testing to ensure the reliability and condition of the used car. Before finalising any deal, consider the following tests:

• Physical inspection

A comprehensive physical inspection of both the exterior and interior of the car is critical. Look for damage, rust, or wear. Check the tyres, lights, and brakes condition. A detailed examination at this stage can help you find any potential issues and set the tone for the rest of the buying process.

• Test drive

Beyond aesthetics, this is the phase where you gauge car performance in real-time. Pay attention to how the car handles, listen for any unusual sounds, and assess the brakes and steering responsiveness. The test drive is your opportunity to assess not just the vehicle's mechanics but also your personal comfort with it.

• Service history

Requesting and reviewing the car's service history is a crucial step. A well-documented service history indicates how well the vehicle has been maintained over time. It provides insights into any recurring issues, repairs, and the overall care the car has received.

• Chassis number and engine number check

Verify the chassis and engine number against the seller's documents. It serves as an identifier for the vehicle and provides crucial information about its manufacturing details. Confirming the authenticity of this information safeguards against fraud or misrepresentation.

Ways of financing a used car
 

Purchasing a pre-owned car requires thoughtful consideration and you can choose to pay in full or get a used car loan. Here are common ways to finance your acquisition:

• Personal savings

Using personal savings for the purchase eliminates the need for financing and interest payments. While this approach might impact liquidity in the short term, it provides the buyer with more flexibility and negotiating power during the transaction.

• Bank loans

Banks in India provide used car loans with competitive interest rates. For instance, IDFC FIRST Bank offer one of the best pre-owned car loans with rates starting at just 11.49% per annum. In addition, you get a flexible repayment period of up to 7 years to repay the loan conveniently.

• Financing through dealerships

Some dealerships provide in-house financing options. While they are a convenient option, buyers should check the terms and interest rates associated with dealership financing.

Conclusion
 

Purchasing a pre-owned car in India demands a blend of research, inspection, and strategic decision-making and the above used car buying guide can help you make informed choices. However, following the systematic approach, conducting thorough tests, and a well-thought-out purchasing strategy, you can confidently start exploring the used car market.

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.