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10 parameters on which to judge a second hand car for purchase

By Finserv MARKETS - Aug 24,2019
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Parameters for Second Hand Car Purchase

In 2017-18, the sales volumes of second-hand cars in India (3.6 million units) surpassed those of new cars (3.2 million units). In 2018-19, business in the pre-owned cars market was more than Rs 1 lakh crore, more than half of the new cars segment.

Clearly, it is a thriving business in India, with many people now opting for second-hand cars rather than brand new ones, particularly now that a lot of this business is conducted in the organised sector. If you’re planning to buy a second-hand car, read on to how you should evaluate a pre-owned car for purchase.

Is it in your budget?

Your budget is, of course, the most important determinant of your choice of purchase. It is important to remember, however, that your budget isn’t only about the price at which you buy your car. It’s also about the maintenance of your vehicle, so make sure you know and understand those costs as well. Include these costs in your budget and then make an informed choice when judging which car you should go for.

Who’s selling?

You can obtain a pre-owned car from various sources — directly from the owner, through a used-car broker, or a large franchised second-hand dealer. If you decide to buy from an owner or broker, make sure you get a trusted mechanic to inspect the car inside out. Depending on the condition of the car, you also have room to bargain and negotiate the price.

Buying from an organised used-car dealer is more expensive than the other two options. However, these come with thorough pre-sale inspections, and some sellers offer service packages and warranties. You can rest assured about the quality and condition of the car, and you may end up saving a lot in repairs and maintenance later on.

The age of the car

Cars start depreciating in value the moment they leave the showroom, which means you can get a great deal even if the car is only a few months old. Generally speaking, the value of a car will drop sharply after two to three years of ownership, so that is the ideal age at which to buy a used car. If used well, it would still be in good condition and may still be covered by an extended warranty.

It is not advisable to buy a used car more than five years old, or one that has been discontinued in the market. While it may be tempting to buy a higher-end model a couple of years older than a low-end model (but relatively newer) selling at the same price, remember that the cost to maintain an older and higher-end car is a lot more.

Check the odometer

A used car’s mileage is one of the biggest factors in a buyer’s decision. How much the car has been driven is a good indicator of a car’s wear and tear (even if it has been carefully maintained). The average second-hand car comes with 10,000 km per year of use. Also keep an eye out for odometer tampering, which is a fairly common exercise in the unorganised market.

Check for signs of poor maintenance

A quick look under the hood for signs of damage, dents or rust, and a visual inspection of the exterior and interiors of the car will give you an idea of how responsible the owner was with maintaining the car. If there are visible defects on the outside, chances are the insides aren’t very healthy either.

Ownership history

It is not advisable to buy a car that has changed multiple hands and owners. It could indicate rough use, or a recurring defect with high maintenance costs which made the owners sell the car.

Insurance history

Check the existing insurance papers of the car. This will give you an insight into whether the car has had any accidents or insurance claims related to them. Check the No Claim Bonus percentage — higher, the better. It’s best to avoid buying a car that has large insurance claims in its name.

Service history

Insist on obtaining the service history for the car. This will not only tell you whether the owner has gotten regular servicing done and maintained the car well, but also apprise you of any major repairs that have been made, accident-related or otherwise, and if that has caused any permanent damage to the car. It will also tell you about any recurring problems that the car may have and if that has a high maintenance cost attached to it.

Look at what’s inside

A thorough inspection from a trusted mechanic or an organised used-cars showroom is an absolute must. This will help you judge the car’s wear and tear, and either get any problems fixed by the owner before purchase, or decide against buying the car. For instance, a monsoon-affected car may look spic-and-span from the outside, but may have severe internal damage that could cost you a lot in maintenance and repairs.

Make sure to check all the filters (air, fuel, transmission, oil), brakes, tyres, suspension, underbody, and the interiors (such as AC, lights, locks etc).


Make sure the car’s paperwork is in order — this is absolutely crucial. Important documents include the registration certificate, vehicle insurance papers, original purchase invoice, road tax receipt, pollution certificate, and form 35 if the car was financed, along with a copy of the NOC from the financing company.

Take a test drive

Finally, take a test drive to check for anything out of the ordinary, like vibrations, noises, alignment issues, and the like.

If you’re careful about these evaluation metrics during your second-hand car purchase, this can be a positive and rewarding experience for you. And with the Bajaj Finserv Loan, it can be hassle-free too! Offered on Finserv MARKETS, the Bajaj Finserv Loan comes with affordable interest rates, basic eligibility, and instant approval.

Also read about why your credit report is important for availing loans.

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