Home / Car Insurance / Articles / 5 Things to Consider Before Buying a Used Car
Team AckoOct 14, 2022
Some buy a used car to hone their driving skills before buying a brand-new vehicle, while some might go for it due to budget constraints. Whatever the reason to buy it, a car is a car, and often, it is dear to its owner. This desire to own a car has led to a thriving used car market. You can buy a used-car or a pre-owned car from an individual seller (a regular car owner), a broker, or a company.
Nowadays, renowned car brands have stepped into the used-car arena and India’s organized used-car industry is growing. Therefore, you have a lot of options. However, you need to be attentive and cautious while pursuing those options. Read ahead to know more about things to know before buying a used car.
Conducting a rigorous check of the vehicle becomes even more important while you are purchasing a used car because of the complications involved. Thus, make sure to consider the below-mentioned points as a checklist. Here is the checklist for buying a second-hand car.
Once you have zeroed in on the car, it is important to get into minor details to arrive at the purchase decision. If you have good knowledge about the technical aspects of a car, you can examine the vehicle yourself or else seek help from a trusted mechanic. Things might seem normal from the outside, however; a skilled mechanic will be able to point out if there was a cover-up regarding the exterior and if the engine, along with other parts, is worth the price.
Here’s a list of things to check and inspect with regards to the car’s condition before buying a used vehicle in India.
Have a look at the upholstery in the car. Check the front and back seats for any tear or stains. If the vehicle has electronic items such as a music system, monitor, etc., then try using it to ascertain its functionality.
Take a good look at the vehicle from all angles. Things might look fine at first glance, but a close inspection can reveal a different picture. Watch out for rusting and paint damage.
While it is crucial to inspect the car closely, taking a step back and inspecting the car’s framing can also tell a lot about the vehicle. Check if the car is placed evenly and confirm that there’s nothing loose near the undercarriage.
The condition of the tyres can be good or bad depending on the usage. You can check for the uniformity of the tyres concerning wear and tear. If the tyres are not worn evenly, it can lead to alignment issues, which means the car might tend to drift in a direction while driving.
It is suggested to inspect the engine thoroughly. Check for leaks, corrosion, and cracked tubes. Also, look at the oil and transmission fluid using a dipstick.
If the car is not too old but has major mileage issues, then it can be a result of deeper problems. Discuss the mileage with the seller in detail as it is difficult to inspect in one go.
Test driving the car will give you a lot of insights related to its performance. Make it a point to drive the car on a highway, in narrow streets, take U-turns, etc. give special attention to the brakes. Driving the car for a considerable amount of time will tell you about its acceleration and suspension along with its ability to manoeuvre.
Some car owners meticulously maintain the servicing records. They have the receipts filed and dates noted. On the other hand, some owners do not give too much thought towards maintaining records. They keep a mental note of the number of visits to the service centre in a year and the type of service performed.
Have a detailed conversation with the seller regarding the car’s maintenance history. If you get the well-maintained records, you can follow the same based on your usage. If you get a verbal history, you can analyse the extent to which the car needs servicing.
Also, read: How Does Third-party Car Insurance Work?
Verify the authenticity of the vehicle’s registration certificate. It will have the owner’s name and the car’s details – engine number, chassis number, etc. The certificate should be original. If it is a duplicate one, it will be marked as DRC. In that case, speak to the seller about the DRC status and check, in which state was the car registered. If you want to move to another state, the car needs to be registered with that state’s Regional Transport Office (RTO). Your name should appear on the vehicle’s registration certificate after the purchase.
Original purchase invoice, insurance, road tax receipt, and pollution certificate are other documents that are needed to be checked while buying a used car. If the car was financed, then form 35 and the financing company’s NOC are also crucial. Note that any modification to the engine’s displacement or a change in the colour of the vehicle needs to be specified in the registration certificate.
While buying a second-hand car, the old car insurance needs to be transferred to the new owner’s name. If the seller doesn’t do it proactively, it is the buyer’s responsibility to get it transferred. There might be legal issues if the car insurance is not transferred in the new owner’s name and the vehicle is involved in an accident or other such unfortunate events.
Also, the extent of the insurance coverage needs to be checked. You need to check if the active insurance policy is a Third-party Liability policy or a Comprehensive one. If you feel that you need to strengthen the existing insurance policy, then appropriate car insurance Add-ons can be considered while renewing.
You can also choose to buy a new policy for yourself by discontinuing the existing one. Driving without a valid car insurance policy is a punishable offence in India, therefore ensure you at least have the mandatory Third-party policy. The other option is to buy a wide-ranging Own Damage cover by opting for a Comprehensive policy.
This point is related to car insurance. NCB is a bonus. It is a reward for not filing a claim during the policy period. Therefore, it is known as a No Claim Bonus (NCB). This bonus can fetch you a discount while renewing your car’s Comprehensive insurance policy. Such a bonus is associated with the car’s owner and not the car. Transfer of No Claim Bonus can take place from the owner’s old car to the same owner’s new car but not from a seller to a buyer. Therefore, it can be taken into consideration when the owner sells the previously-owned car and shifts to a new car.
For example, concerning second-hand cars, this can be beneficial for you if you are selling your existing car and then purchasing another car. You can end up saving a considerable amount of money on car insurance if you have 50% accumulated NCB. You can calculate and note that amount while budgeting for your latest vehicle’s comprehensive insurance policy.
Also, read: Basic Car Maintenance Tips for Beginners
The details of the new car owner should be reflected in the car’s registration certificate. For that, you will have to follow the procedure laid down by the RTO in your area. In case of a broker or a used-car company, the transfer of ownership process is also handled by the broker/company.
Spending some time to ponder over the following points will help you to make the right decision concerning the vehicle.
Generally, cars might misbehave after five years. After a few years, the used car might need repairs, and its maintenance cost might increase. There is a chance that the car might not be used to a great extent but if the car was manufactured five years ago, will its spare parts be easily available? Comparatively, one can afford to buy a new car and not use it optimally but it can be counterproductive to purchase a used car without a long-term plan in mind. Think it through.
Whether it is purchasing a new car or a used car, it is an expense. Like every major expense, this also needs to be planned. Loans, interest rate, exchange value of used car, etc. are the terms that need to be thought about in detail before going for a used car.
If you plan to buy a used car for ‘x’ amount, how much are you going to invest to repair it if needed? Do you plan to customize it or add accessories to it? How much do these additional expenses amount to? These are certain questions that you need for efficient financial management with respect to purchasing a used car.
Also, read: Does car insurance go down as cars get older?
If you have some queries regarding buying a used car, read ahead to know some frequently asked questions on that topic.
You can buy a used car from a different state. Make sure to adhere to the registration rules of the Regional Transport Office in those states while buying the vehicle.
It can be beneficial to buy a second-hand car based on your need. It is a subjective question. Those who are operating on a tight budget or getting used to driving might find a second-hand car to be beneficial as it meets their requirements.
The used-car market in India has changed in the recent past. Nowadays, there are a lot of professionals that have entered the market. Therefore, you have lots of options when it comes to the types of cars available. You can get loans from banks for the same. Make sure to conduct a thorough check using the points mentioned in this article before buying a second-hand car. As far as options for sellers are concerned, you can buy from car owners like you, brokers, and second-hand car dealerships.
Yes, you can buy a Comprehensive car insurance policy for your second-hand vehicle based on the terms and conditions of the insurer.
No, the NCB will not get transferred as the NCB is for the owner, unlike the policy which is for the car.
|Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.|
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