IRDAI Regn. No. 157


5 Things to Consider Before Buying a Used Car

Some buy a used car to hone their driving skills before buying a brand-new vehicle, while some go for it due to budget constraints. This desire to own a car has led to a thriving used-car market. Renowned brands have stepped into the arena and India’s organized used-car industry is growing yearly at 25%.

5 Things to Consider Before Buying a Used Car - Acko

If you are planning to buy a used car, make sure to consider the following five points.

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, 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 finance management with respect to purchasing a used car.

  • Age

Generally, it is said that a car starts misbehaving after five years. After 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 will be counterproductive to purchase a used car without a long-term plan.

  • Inspection

Once you have zeroed in on the car, it is important to get it thoroughly inspected 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 coverup regarding the exterior and if the engine along with other parts is worth the amount.

Primary things to check are the engine’s condition, car’s exterior and frame, underbody, electrical equipment, steering, wheels, and the ABC of driving – accelerator, brake, and clutch. It is also suggested to test drive the vehicle in various terrains to gauge its performance in varied conditions.  

  • Documentation

Proper registration certificate is a must. Original purchase invoice, insurance, road tax receipt and pollution certificate are other documents that need to be looked into. 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 color of the vehicle needs to be specified in the registration certificate.

  • Insurance

While buying a used car, the car’s insurance needs to be transferred in 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.

Ready to Drive

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 above-mentioned points as a checklist before making the vital decision.

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- Last updated on by Editorial Staff