Buying used cars or not is always a big confusion. Used cars offer much more for less but on the other hand there is a risk associated with buying them. Here is our guide to a Used car Purchase.
Firstly lets start with a basic question-
Why Buy a Used Car?
1. More for less- The biggest advantage of buying a used car is they offer more for less. For example, you get a new Maruti Suzuki Alto K10 at a price of 3.80 lakhs. But in the used market you can get a 1-2 year old Ritz, Brio, i10, figo.etc. for the price of a new Alto. If that doesn't satisfy you then a 3-4 year old Fiesta, Accent, Indigo, Dzire.etc. can be bought for the same price. Lastly you can get a 5 year old Honda City for the same price.
2. Financing Available for used cars- Many banks are now offering loans on used cars. Though there is always a restriction on how old the car is. On the other hand you can take a loan against Fixed Deposits.
3. Certified Used Cars- Many dealers are offering certified used cars now. These dealers offers cars which are close to new cars. These used cars are listed after they pass through a rigorous check list. Certain used car dealers offer a warranty on their cars. In India the most famous used car dealerships- Mahindra First Choice, Maruti Suzuki true value, cartrade.com & Authorized car dealerships.
4. Online Classifieds- Many websites have come up which offer online classified services where you can list your car or bike. With coming of players like olx, quikr.etc. one to one interaction between seller and the buyer. With the absence of any agents the deals usually are pretty transparent. This also helps both the seller & buyers in having a look at cars available from other cities with just a click.
5. Warranty and Reliability- Many manufacturers offer an extended warranty upto 5 years (some even upto 6 years). The extended warranty gives you a peace of mind. Although the modern cars are very reliable and one barely has to worry about failures unlike cars before. Regularly serviced cars can go for 200k-300k kms easily without any trouble.
6. Insurance & Depreciation- The biggest advantage of a new car is that the first owner takes all the Depreciation which is really high in the initial years. The other advantage being you pay a lesser insurance premium when buying a used car.
7. Sales Tax- In most of the states you pay no tax when buying a used car. All the sales tax is paid when the car is bought new. This saves up a lot of money especially when buying luxury cars.
So now we have enough reasons for buying a used car but everything comes with its fair share of pros and cons. Now lets have a look at some of the cons.
6. Insurance & Depreciation- The biggest advantage of a new car is that the first owner takes all the Depreciation which is really high in the initial years. The other advantage being you pay a lesser insurance premium when buying a used car.
7. Sales Tax- In most of the states you pay no tax when buying a used car. All the sales tax is paid when the car is bought new. This saves up a lot of money especially when buying luxury cars.
So now we have enough reasons for buying a used car but everything comes with its fair share of pros and cons. Now lets have a look at some of the cons.
Why not to buy a used Car?
1. Difficulty in finding the right car- Whenever you want to buy a used you need to be really patient.
You need to browse around classifieds and even visit certain dealerships. Although the certified used cars dealerships do make your experience quite similar to that of buying a new car but all said and done buying a used car is never easy.
2. High rate of interest- Even though many banks offer loan on used cars, The rate of interest is really high when compared to new cars.
3. Depreciation- Used cars deprecate lesser than new cars, hence offer less tax benefits especially for businessmen.
4. More for less requires more upkeep too. Remember if you buy a used Honda city for 5 lakhs it still has the upkeep costs of a 10 lakh car. On the other hand a new 5 lakh Brio will be cheaper to maintain.
5. Service history & Accidental damage- Many times the service history of a car isn't available. Many dealers even mess with the ODO and hence reduce the number of kms the car has clocked. Many a times you might come across cars repaired after an extreme either due to a natural calamity or a road accident. If the chassis has borne the damage then it is highly unsafe to drive such a car.
So now, We have both the pros and cons associated with a used car. Now lets have a look on the usual procedure while selecting a used car.
2. High rate of interest- Even though many banks offer loan on used cars, The rate of interest is really high when compared to new cars.
3. Depreciation- Used cars deprecate lesser than new cars, hence offer less tax benefits especially for businessmen.
4. More for less requires more upkeep too. Remember if you buy a used Honda city for 5 lakhs it still has the upkeep costs of a 10 lakh car. On the other hand a new 5 lakh Brio will be cheaper to maintain.
5. Service history & Accidental damage- Many times the service history of a car isn't available. Many dealers even mess with the ODO and hence reduce the number of kms the car has clocked. Many a times you might come across cars repaired after an extreme either due to a natural calamity or a road accident. If the chassis has borne the damage then it is highly unsafe to drive such a car.
So now, We have both the pros and cons associated with a used car. Now lets have a look on the usual procedure while selecting a used car.
1. Budget And Requirements-
The first and the most basic step in a used car purchase is that you need to fix a budget and list down your requirements. A fix budget makes you shortlist used cars with ease. You should decide your requirements on the basis of the points like- monthly usage, preferred brands, colour, after-sales service in your area.etc. For further details regrading your requirements please refer to our Vahan Purchase Used Car Form (Buyer)
2. Search For The Right Car
Firstly you need to be really patient when buying a used car. You have to wait for the right car to come. Now where to look for the right used car-
1. Spread a word among your friends and relatives. This will help you save a lot of money as you would be directly dealing with the owner who is known to you. But dont be in a hurry. Verify certain things which will be mentioned in the next point.
2. Online classifieds like Vahan Purchase, olx, quikr, carwale.etc. where you have cars listed from both the dealers and individuals. These classifieds will also help you have a look at cars in other cities around you.
3. Certified/ Authorized Car Dealerships- Many authorized dealers and certified used car dealers like Mahindra First Choice, cartrade.com, Maruti true value.etc. offer certified used cars. They basically offer you cars which are as good as new cars. Overall they enhance your used car purchase experience.
3. Verification
Once you have found the right car, you need to verify a lot of things. Here is a list of those things-
1. Service History- You need to verify the service history of the car under consideration. Once you obtain the registration number of the car, You need to call the authorized dealer who will give you the details about the date of last service, service cost, parts changed. If the servicing was done regularly and no crucial components were changed then the car is worth a shot. If you find any crucial components changed (like engine head, crank,gearbox.etc.) then it is best you stay away from such a car. Something not reliable in its early life will never be reliable later. Normal parts like brake pads, air filter.etc. if changed regularly is not a big deal.
2. If you find no issues with the service record then you should visit the seller and have a look at the car. Please take an expert mechanic or a knowledgeable & experienced friend with you when you visit the seller. They can easily find out about any accidental damage repairs or random issues which we normally can not find out. See to it that you visit the seller yourself and not ask him to bring the car to you as it will help you analyse the car in a cold start condition. Always analyse a car in daylight.
3. Once done with the analysis you should verify the documents like valid insurance, Registration book/card, Tax receipt, Bank NOC (if the car was on loan) & original invoice. Verify things like the engine size as a few cars are sold with multiple engines (like the Verna comes with 4 engine options 1.4L & 1.6L with both petrol and diesel) with the help of the RC & if possible get he VIN code and decode it to get more details about the car. VIN Decoder.
4. Finally take a proper test drive of the car. Keep the music off and drive the car with windows rolled up. If possible try driving the car in traffic, bad roads and open roads/highways to check for any sounds or irregularities observed when on the move.
Once the above points are verified we come to the final step-
4. Buying A Used Car
Finally convey it to the seller about your interest in buying his car. Please see to it that all the conversations and confirmations are in writing. Do not trust any verbal commitment.
When you go for the final negotiation please go with a token amount (5-15k) or a cheque book. Remember one thing as a buyer you can walk out of the deal anytime you want as there is no compulsion. There is no fixed price for cars in the used market, you get the best deal based on your negotiation skills. If you are not so good at negotiations then you should take a relative or friend along with you who is good at it.
Once the deal is finalized you need to get the following things from the owner-
1. Duplicate keys.
2. Tax Receipts.
3. PUC certificate and if any warranty related papers.
4. Service History (if bills available)
5. Registration certificate and Tax receipt.
6. Owners Manual.
7. Insurance Policy (if being transferred)
8. RTO Form no.29 (Notice of transfer)
9. RTO Form no.30 (Report of transfer)
10. RTO Form no.28 (if the buyer belongs to a different RTO)
After all this you do become the new owner of the car but please get a through service done as soon as you get the car, replace tyres if required & add the necessary accessories. Finally after all this you are going to have a peaceful ownership experience.
If you want to sell your car then you can use- Vahan Purchase Used Car Form ( Seller)
If you want to buy a used car then- Vahan Purchase Used Car Form (Buyer)
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