Today, a car is no more considered as a mere luxury. It has become a necessity in today’s fast-paced life. The shortfalls in the existing public transport infrastructure have only increased the need for private car transport.
However, the sluggish growth in incomes for some, high expenses and saving requirements for others, over the past decade has meant that not everyone who wants to have a car can actually buy one. This has led to the growth of second-hand car market where first-time buyers unable to afford new cars can consider used cars as a cheaper option. But buying a car in the second-hand car market is far trickier than buying a new one.
There are number of factors that you will have to consider before settling on a particular car. Here is quick read to ensure that you get the best deal on a second hand car.
1. Where to buy from: Generally, you can buy used cars from three sources — unorganized sector, organized sector and directly from individual sellers. Unorganized sector comprises of the neighborhood used car dealers where you will find both the highest risk as well as the best deals in used cars segment. Typically, they do not provide any warranty and the chances of getting fleeced are very high. Everything will depend on your ability to analyze the condition and documentation of the car.
Organized sector includes car manufacturers’ owned used car entities and independent firms (including online ones) dedicated to used car business. Some of the major players in the used car entities owned by auto manufacturers are Mahindra First Choice, Hyundai H Promise, Maruti True Value and Carnation Auto.
As these firms sell certified used cars, which go through stringent quality checks and testing before being sold to the consumers, they are considered as the best and safest option of buying used cars. Some of them may also provide engine and gearbox warranty. They are also provide good after-sales service. However, for these conveniences, the per-owned car outlets of auto companies will charge you more than your neighborhood dealer in the unorganized sector.
Finally, you have the option of buying cars directly from individual owners, which may provide you a good deal because of the absence of the middlemen. However, the flip side is that you will have to do the paperwork on your own.
2. Check and compare vehicles: Always check the second hand cars during daytime as it is easier to detect flaws in the natural light. Take the car out for a test drive to detect the obvious problems and drive it along various road conditions.
Pay close attention to its steering, brakes, gears, suspension, engine noises, ease of driving, etc to see how the car performs in tough conditions. Try to take along with you a seasoned driver or a mechanic to provide a second opinion to you. If possible, get the car inspected in a workshop before closing the deal.
Check the paperwork: Going through the paperwork will reveal the possible outstanding EMIs or accident write-offs on insurance. Check the original delivery note and registration certificate to verify the ownership of the car.
Make sure that the engine number and the chassis number mentioned in the registration certificate and insurance policy tally with the ones in the used car. Go through the insurance papers, RTO tax certificate and other applicable tax receipts to ensure that the insurance premiums and taxes have been paid.
If the car was financed through a car loan, make sure to obtain a no-objection certificate from the lending institution. Also remember to go through the service log to find out whether the car was serviced in regular intervals or whether it had a major mechanical fault. You also need to check the Pollution Under Control (PUC) certificate of the old car and its bi-fuel certification, if it is fitted with CNG/LPG kit.
3. Bargain hard: Once you are done with testing the vehicle and checking the paperwork, it is time to negotiate its price. Check out with various second-hand car dealers to set a benchmark price for the car and negotiate hard with the seller for a discount. Always remember that the seller of used cars, irrespective of whether it is a dealership or an individual seller, would be more interested in closing the deal than you.
Also remember to factor in the resale value of the car while negotiating the deal. For example, white and silver cars attract better prices during resale. However, if you find the seller or dealer offering a discount too good to be true, then treat such offers with a healthy dose of suspicion.
4. Consider the costs of transferring documents: Do not forget to take into account various costs associated with the transfer of insurance policy, ownership and car number. No re-registration charges or road tax is payable in case of transfer of ownership within the same state. Most RTOs charge Rs 100-250 for the issuance of registration certificate in the name of new owner.
Similarly, a nominal fee is charged for the transferring the insurance policy. The new owner needs to change the name of the insured in the policy name within 14 days of the transfer of RC. Although the no-claim bonus (NCB) of the previous car owner cannot be transferred to the new car owner, you can use your own NCB from your own previous car insurance policy to get a discount for the new policy on the used car. Use this costs to bargain hard t
To sum it up, a car purchase is a long-term buy which will involve your own money. Therefore, close the deal only after a careful evaluation of all the pros and cons of going with that car.
“How to get the best deal on a second hand car?” is a guest post contributed by team paisabazaar