If you want to strike a good deal while purchasing a car, then invest your money in a second-hand car rather than choosing to buy a new one. When you purchase a new car, it begins to depreciate as soon as you drive it out of the showroom and continues to lose a substantial percentage of value in the initial years of ownership. However, when you purchase a second-hand car, the previous owner would have borne the brunt of depreciation in the first few years. Thus, the cost of buying a used car is significantly lower as compared to that of a new car.
Cars are not just luxury, they are also a convenient transport medium for daily commutes and long drives. Considering this, many want to own their favourite four-wheeler, which also resonates with a status symbol. Purchasing a car at its current high price may not be feasible for many. Fortunately, opting for a second-hand or used car can be an excellent way to save money.
New cars lose value rapidly, with a significant percentage depreciating as soon as you take it out of the showroom. However, if you choose to buy a used car, the previous owner would have already taken care of the initial depreciation. Hence, the cost of buying a used car is much lower than that of a new one.
Read Also: 10 Best Second Hand Cars in Delhi
Is a Used Car Worth Buying?
The Indian automobile industry is transforming rapidly, with car prices increasing. As new cars get costlier each year, buying a used car seems to be a better option for the commoner. Since manufacturers launch more recent versions of their car models more frequently than earlier, more modern vehicles have entered India's used car market. It makes used cars in India a good buy without busting your wallet.
A used car is worth buying for several reasons. Most importantly, you can purchase a higher variant of your favourite vehicle at a fraction of its price. Secondly, you can drive freely without worrying about dents and scratches – a nightmare for new car buyers. Since the first owner must have already taken the brunt of cost depreciation, it will be slower for you if you buy a used car in India. In addition, opting for a used car can lead to lower insurance premiums and the opportunity to upgrade to a newer vehicle sooner. However, selecting a pre-owned car can prove to be a more challenging decision compared to purchasing a brand new car. It's important to exercise caution when buying a used car. This article provides a step-by-step guide to buying a used car in India.
Read Also: 10 Second Hand Cars Under 2 Lakh in Delhi
Advantages and Disadvantages of Buying a Used Car
The used car market in India has grown a lot lately. If you're looking for an affordable vehicle, it's important to know how to buy a used car. But, before you decide, it's a good idea to consider the pros and cons.
Advantages:
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Affordable Price: A new car’s value depreciates significantly in the first few years. That means you can find a used car in India launched a couple of years ago at almost 20% of its original price.
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Better Variant: When buying a second-hand car, you can get the same car’s top variant at a fraction of its cost.
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Lower Loan Amount: Since a used car is cheaper, you need to borrow a smaller loan amount that you can repay easily. A smaller loan means easier EMI management and a chance to build credit without stressing the budget.
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Lower Insurance Premiums: Car insurance is mandatory. However, the premiums for a used car are comparatively lower than for a new car. The first owner must have already paid the heftiest car premiums, reducing the insurance cost now.
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Warranty: Several brand-authorised dealerships warranty used cars and their repairs. They also test the vehicle to ensure they are fit for second ownership.
Disadvantages:
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Too Good to be True Deals: When shopping for a used car in India, it's important to be cautious of deals that appear to be very cheap. A low price may indicate that the car has serious issues, which may not be visible on the outside but require expensive repairs. To avoid any unexpected problems, it's crucial to thoroughly review all details before making a purchase.
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No Warranty from Manufacturers: Unless the original warranty is still valid, used cars do not come with a warranty from the manufacturer. However, some used car dealerships offer warranties on second-hand vehicles.
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Higher Interest Rates: If you take out a loan to buy a used car, expect to pay a higher interest rate than you would for a new car loan.
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Lack of Choice: If you're set on a particular car model or variant, you may not be able to find it in the used car market. There are low chances that you will find a perfect match. Sometimes, you may find a car with a good engine but lacks features. Or a higher variant with poor maintenance. While looking for a used car, you might need to compromise on one thing.
So, buying a used car comes with its share of advantages and disadvantages. Consider them before entering a used car dealership to make an informed decision.
Read Also: 10 Best Used Cars Under 5 Lakhs in 2023: Top Picks
Things to Know Before Buying a Used Car
1. Decide Your Budget
If you have already decided to buy a used car for yourself, then it is time to set a budget. Used cars in India are available at a wide price range. You can find a used car for as low as Rs 50,000 to as high as Rs 50 lakh or even more. Set your upper spending limit and do remember to consider additional costs of purchasing a car such as a vehicle registration fee, insurance cost, repair work and general upkeep.
2. Create a Target List
Once you have agreed on a budget, start making a list of requirements for your vehicle. You must also choose the type of vehicle you want. You can choose from SUVs, sedans, small cars and electric vehicles. It is recommended to check the reviews and ratings of the car you plan to purchase.
3. Research Your Options
Used car dealerships are now presenting almost every corner of the city, everywhere in India. You can find the best dealer in town either by word of mouth or by comparing dealers online. Finding good dealers online is a fairly simple process. Just shortlist some popular second-hand car dealers and compare options available, cost, service and customer reviews before choosing the one for yourself.
4. Check the Vehicle's History
Once you have explored various options and have narrowed down your search list, it is time to check the vehicle's health report. Check what kind of maintenance or repair works has it undergone. Double-check if the vehicle has ever been involved in a collision. If you are buying a used car in India, it is advisable to avoid buying a car that has been involved in an accident.
5. Call the Seller
Contact the seller to double-check the information you have gathered about the vehicle. If you are buying from an individual seller, find out why they are selling the car and if there are any mechanical concerns. If you are considering a dealer, call to check the availability of the car. If everything goes fine, book an appointment for a test drive.
6. Test Drive
A test drive will give you a clear idea about your shortlisted used car's condition. Take the car for a drive on different types of roads and cover a distance of at least four to five kilometers. You must also check the condition of the brakes and clutch while driving. Ensure that the speedometer and the distance recorder are working properly. If there is a vibration in the steering, it could mean some major issues with the engine.
7. Get a Professional to Inspect the Car
If you're planning to purchase a used car, having it inspected by a professional mechanic before making any payments is recommended. Buying from a trustworthy dealership reduces the likelihood of receiving a damaged model. However, if purchasing from a private seller, it's best to have a skilled mechanic conduct a thorough inspection. You can find a used car inspection specialist at various locations, including:
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Local Mechanic: If you trust your local mechanic, take them to the site for a car inspection. Taking the car to their garage will be more advantageous. They have all the equipment required to lift and inspect the car from all sides.
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Regional Chain: Several regional and national chains offer used car inspections. Their specialists assess used cars to identify any potential problems and give an estimate of the necessary repairs.
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Competitor: Several used car dealers have service departments that offer car inspections. Even if you buy a car from their competitor, they can inspect the car in question and trouble spots.
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Mobile Inspectors: Many dealers won't allow you to drive out the car for inspection. If you cannot bring the vehicle to the inspector, you can bring the inspector to the car.
Here’s a used car mechanic’s inspection checklist:
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Number of previous ownerships
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Mileage and fuel economy
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Motor vehicle record
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Service record
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Recall information
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Safety ratings
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Signs of damage or rust in the undercarriage
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Current tyres’ tread life
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Market value
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Warranty
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IDV and insurance
8. Double Check the Vehicle's Papers
Before finalising the used car, it is advisable to check the papers properly. Check for the car's registration certificate; match the vehicle's engine and chassis numbers. Check the insurance paper and PUC certificate along with the original sales invoice. Here is a detailed list of documents to check when buying a used car in India to ensure it is not stolen.
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RC or Registration Certificate: Take a closer look at the RC, check its engine and chassis numbers, and match them with the plate on the engine bay. Walk away if there is any discrepancy.
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Purchase Invoice: The car’s original buyer must have the purchase invoice with the correct date of purchase, ex-showroom price, and other details.
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Insurance Documents: Car insurance is mandatory in India. So, checking its papers will let you know the insurance validity, due date, IDV, and cost. Another reason to check the insurance documents is to learn about the previous owners' claims for the car.
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Service Record: Also known as the blue book, the service record shows all services the previous owner has availed. It also gives information about service intervals and an idea of the correct odometer reading.
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RTO Forms: Check RTO forms to know the car's ownership transfer. Form 28 is mandatory for ownership transfer that the seller's RTO issues. Form 29 is the official transfer notice of the car ownership. Form 30 is the official application for the transfer of car ownership. Forms 32 and 35 are necessary if the car still has a pending loan.
Other documents to check when purchasing a used car in India include the no objection certificate, clearance certificate, Road Tax Receipt, certification for bi-fuel kits, emission certificate or PUC, owner’s manual, ownership transfer, etc.
9. Negotiate Well
This is when the real fun begins. Since you would have already set a budget for the car purchase, stick to it and negotiate with the seller over anything you deem important such as a major dent or bad paintwork. Since the cost of a used car is the seller’s decision, make sure to negotiate well.
10. Used Car Finance
Today, many financial institutions offer a loan for the purchase of used cars. If you are under a budget constraint, you may avail of this option. Before applying for a loan, compare the used car finance rates with different lenders and check your used car loan eligibility with the lender of your choice. If you have a good profile and strong creditworthiness, you may seal a better deal on used car finance.
11. Ownership Transfer
The ownership of a car is transferred with its sale. The previous owner of the car must inform about the transfer to the RTO under which the vehicle is originally registered. This process must be initiated within 14 days along with a letter of intent and the details of the new owner.
12. Drive Away
Once you are done with the above formalities, it is time to announce your purchase and be a proud car owner. You can now spin off the car to your home or wherever the road calls you.
Read Also: Steps to Buying a Second-hand Car on EMI
Conclusion
Used cars are any day a better deal than spending big on new car models which start depreciating soon after the purchase. Second-hand cars are value-for-money. Also, used cars require less financial stress and offer luxury models at a reasonable price. If you are planning to buy a used car, follow the above steps to get the car of your dreams at an affordable cost.
Frequently Asked Questions:
1. Why should I consider buying a used car?
Buying a used car is worth it for several reasons, including money-saving, access to a better variant on budget, lower loan amount requirement, etc. A used car loan EMI calculator helps repay the loan in easy EMIs without stressing your budget.
2. What's the first step in buying a used car?
The first step in buying a used car is to start with setting a budget and selecting the model you want. Post that, you can take a look at the available options.
3. Where can I find used cars for sale?
You can find used cars for sale both online and offline. Several online platforms serve as a connection between potential used car buyers and sellers. You may also approach an online or offline used car dealership to get your desired car.
4. What should I research before buying a used car?
Before purchasing one, look at the used car's physical condition and mechanical health. Check the car's papers, compare prices, have a mechanic inspect it, and take it for a test drive
5. How do I pay for a used car?
If you're buying from the owner, you can pay in cash, by cheque, with a bank transfer, or another way you agree. If you're buying from a dealership, you'll need to pay at the dealership office.
6. Which Used Car Is Best to Learn Driving?
The best used cars for learning to drive typically include compact models like the Toyota Corolla, Honda Civic, or Ford Focus. These cars offer good visibility, reliability, and ease of handling.
