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Buying a used car? Check the documents

used_carThe pre-owned car market is brimming with choices. Unfortunately, this semiorganised market is also teeming with unscrupulous sellers. So, if you don’t want to be taken for a ride, check the vehicle’s paperwork thoroughly. Besides, make sure that the seller informs the regional transport office (RTO) where the car was registered about the sale within 14 days of buying the vehicle. Here’s a list of documents that you should demand from the seller before finalising the deal.

Whether you’re buying a used car from an individual, a dealer or an auto company , the following documents are mandatory.

Registration certificate:

The RC is the most important document and provides vital information about the car, including its chassis nu m b e r and engine number. You need to check the state in which the car has b e e nregistered. If you plan to drive it to another state, you will have to get the registration done there. Since it’s a time-consuming process, most people avoid it but it can lead to problems in case you meet with an accident .

If the car is very old or was involved in a major accident, the engine may have been changed, so ensure that the RC has the new number. Also, verify that the acronym DRC does not appear on the certificate since it translates into duplicate registration certificate. If it does, ask the seller for the reason.

Insurance:

Get the insurance transferred to your name, otherwise it will be tough to process a claim in case of an accident. While transferring the policy, check if the premium has been paid regularly, the expiry date of the policy and if insurance has ever been claimed. The latter will help you know whether the vehicle was involved in an accident. Also find out if the car has a third-party or comprehensive insurance.

If the insurance has expired or is due to be renewed soon, you could bargain with the seller for reducing the price of the vehicle. “However, the buyer should get a third-party insurance immediately. With car insurance companies clamouring to woo customers, this should not be much of an issue unless the car is more than 15 years old.

Form 32 & 35:

You will need these documents if the previous owner had taken a loan to purchase the car. Before buying, ask the seller to give you a copy of the no-objection certificate from the finance company, which will clarify that the entire loan has been paid off. If you don’t take care of this detail, you could land in a soup. For, after you take possession of the car and the registration certificate is transferred in your name, the lender may ask you as the new owner to pay the pending loan.

Service book:

You should go through the service history of the vehicle, since it will reveal to you the condition of the car. A vehicle that has been serviced on time and through authorised centres will be in a better running condition than one that has been serviced infrequently.

Road tax receipt:

This tax is a one-time payment, which should ideally be paid by the first owner of the car when he registers the vehicle. If it hasn’t been paid, the penalty can run into lakhs of rupees over time, and you, as the new owner, will have to bear this financial burden. The tax varies among states and ranges from 2-18 %, so you should ensure that the seller provides you a receipt for the tax paid.

Car purchase invoice:

A dealer or a company will provide you a printed bill along with the car. However, this may not be possible if you are purchasing the car from an individual. “In such a case, you can demand a sale receipt from the seller.
Dual fuel certification for retro fitment:

If the car has been modified to run on two types of fuels, ask the seller for the dual fuel certification, as well as an NOC from the RTO, which certifies that the vehicle can run on both fuels. The retro fitment is a replaceable piece in the vehicle and has a guarantee of five years from the time it is installed, so you must ask the seller for its sale receipt too.

Who is a better seller?

Individual:

Though looking for an individual buyer is time-consuming and cumbersome, it can help you get the best deal since no middleman is involved. Povaiah says, “It is laborious, but you can get the car at a lesser price. You will also be sure that what you see is what you get, with hardly any tinkering done to the vehicle.” However, a good idea will be to take a trusted mechanic along with you while checking the car. He will be able to ensure that you are not sold a lemon.

Pre-owned car dealer:

Buying from a dealer is less cumbersome as he takes care of the transfer of insurance and RC in the name of the new owner . However, verify that you are purchasing directly from the car owner and that the vehicle has not been transferred in the name of the dealer. “If the car is in the name of the dealer, who has bought it from the original owner, purchasing it will make you the third owner. This will reduce the resale value of the car,” advises Povaiah. You must also enquire if the dealer provides a warranty for the car. While some don’t , there are a few who offer a warranty of six months to one year.

Car company:

Almost all auto companies have their own pre-owned car outlets. Maruti Suzuki has True Value, Mahindra & Mahindra has First Choice, while Hyundai has First Advantage. Even four wheelers in the luxury space have a share in the burgeoning used car market in the country. Mercedes has Proven Exclusivity, while BMW owns Premium Selection.

Buying a pre-owned car from the auto company is probably the safest and easiest option since all the checks and documentation are done thoroughly by the company, which means that it will require minimum overseeing by you. Not only is the car serviced properly before being sold, but the company will also offer a warranty up to one year and 1-3 free servicings. Another advantage is that in case of any issue, you have an assured place to address your grievance. However, this convenience comes at a premium. If your existing car is from the same company, you could opt for an exchange offer and avail of a bonus.

Courtesy: TOI

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