How to Buy a Used Car - Second-hand Car Buying Guide

Buying a used car can be an excellent way to get the vehicle you need while saving money compared to purchasing a new one. However, it requires careful research and planning to ensure you make the right choice. From setting a budget to inspecting the vehicle, the process can seem overwhelming, especially for first-time buyers. Here’s a simple second-hand car buying guide to help you make an informed decision.

The second-hand or used cars market in India is growing exponentially. The primary reason most people opt to buy a used car is that it saves them a fortune. Additionally, there’s a wide range of car models to choose from at affordable rates when buying a used car in India. Moreover, the process is quick and it is easy to secure a loan for second-hand cars as well. Furthermore, retailers offer certain warranties on used cars, which makes the entire process convenient, secure and reliable for the buyer.

In this section, we have enlisted a few quick tips that can come in handy if you are planning to buy a second-hand car any time soon. Here, take a look!

1. Set a Budget in Advance

Before you browse several used cars online or check them out in person, make sure that you have a budget in mind. It is pretty much like buying a new car. However, people tend to overspend when buying a second-hand vehicle. So, it is best to have answers to the following questions beforehand:

• How long do you plan to use the car before buying a new one?

• How often do you plan to drive the car?

• How much amount are you ready to spend on maintenance and repair expenses?

Not only you have to consider the cost of the second-hand car, but also the expenses that will follow after the purchase. Answers to the above question will allow you to set a budget in place before browsing the used car options available in the market.

2. Shortlist Your Options

Once the budget is set, you might want to list down the type of car you need. For instance, if you live in an area with terrible road conditions, you might have to consider buying a car that has a higher ground clearance. If you travel often and carry a lot of luggage, consider buying a multi-purpose vehicle (MPV) or a sedan.

In short, make a list of things you expect from the purchase and then shortlist different models that fall within your set budget. You can read about the top-selling cars in India to choose from on Bajaj Markets.

3. Inspect the Used Car

After you find a desirable car in your budget, proceed to get the car inspected by a trusted mechanic. Doing so allows you to understand if there are any faults in the car and whether or not the problem is fixable. Further, you can ask the owner to get the issues fixed before finalising the deal. If they refuse, you can negotiate the price of the second-hand car and reduce it even further.

4. Take the Car for a Test Drive

You can also request the car owner to give you a test drive to inspect the functioning of car components. Check whether the headlight, steering wheel, gears, and brakes are highly functional. Also, look for weird noises that the car might make during turns or potholes and otherwise. Understand whether you are comfortable driving the vehicle or not. Doing these small inspections will allow you to make an informed decision.

5. Understand the Car’s History

A car’s history is not limited to knowing the odometer number. You also need to have a complete understanding of different factors that contribute to the car’s current condition. Check the previous servicing and maintenance records of the car. Research on the car model and manufacturing year and understand any recurring issues raised by these car owners.

6. Check the Vehicle Documents

Check the existing vehicle registration document and insurance papers (if any). Before you transfer the vehicle ownership in your name, ask the owner to settle any pending traffic challan(s) before finalising the deal.

7. Check Insurance Papers

Usually, the second-hand car you wish to purchase might have an active insurance policy. If that’s the case, you can simply get it transferred to your name after transferring the vehicle RC. However, if the existing car insurance plan has expired, you will have to buy a new second-hand car insurance plan.

The steps to buy a new second hand car insurance are as follows:

• Begin by entering the used car’s registration number and mobile number

• Complete the application form and enter the details of the second-hand car

• Pick the car insurance plan that best suits your needs

• Make an instant and secure online payment

• Your new car insurance policy for the second-hand car will be sent to your email address.

Additionally, verify the claim history of the car you intend to buy and penalties raised against it over the last few years. You can read more about second-hand car insurance at Bajaj Markets.

8. Negotiating the Price

Once you are satisfied with the car's condition and documents, negotiating the price is the next step. Start by using tools like online car valuation calculators to determine the car’s fair market value. Point out any defects or repairs needed, as identified during the inspection or test drive, to justify a price reduction. If the car’s service history is incomplete or accident records raise concerns, use these factors to strengthen your negotiation. Remain polite and professional, but firm in presenting your offer. It’s wise to set a maximum price in your mind and be prepared to walk away if the seller is unwilling to meet a fair price.

9. Complete the Payment

Once the price is finalised, proceed with the payment. Opt for secure and traceable payment methods, such as bank transfers or cheques, to ensure safety and transparency. Avoid paying the full amount in cash, as it offers no record of the transaction. Before making the payment, ensure the seller provides a receipt and all necessary documents, including the registration certificate (RC), insurance papers, and pollution under control (PUC) certificate. Always double-check the authenticity of these documents before transferring the funds.

10. Ownership Transfer

The final step is transferring the car’s ownership to your name. Visit the local Regional Transport Office (RTO) with the required documents, including the signed Form 29 and Form 30 from the seller. Ensure that the seller clears all pending dues, such as road taxes and traffic fines, before initiating the transfer. You will also need to update the insurance policy to reflect your name as the new owner. Once the ownership transfer is complete, you officially become the legal owner of the car, ready to hit the road with confidence.

11. Clean and Fix the Vehicle Before Your First Drive

Once the deal is finalised and you have the vehicle RC and insurance transferred to your name, get the car fixed and deep cleaned before taking it out for your first drive. If your budget permits, you can even give your new car a makeover. Additionally, also get the fluids and oils changed before the first drive.

Here are a few benefits of buying a second-hand car in India:

Affordable

Affordability is the primary objective of buying a second-hand car. You can buy a pre-owned car of your desired brand and model at a much lesser price as compared to a new car.

Minimised Depreciation

The value of any new car depreciates the moment it hits the road. So, a pre-owned car will lose about 50% of its value after 2-3 years. Thus, you can get the second-hand vehicle for a reasonable rate and well within your budget.

Certified and Thoroughly Inspected

If you proceed to buy a second-hand car from an authorised dealer or reseller, be assured that you will find a well-certified and thoroughly inspected vehicle within your budget. Certified, pre-owned vehicles often come with extended warranty and special financing, among other benefits.

Lower Car Insurance Premium

Since you might have to buy a second-hand car insurance plan, the premium of the policy is most likely to be lower compared to buying a policy for a new car. You can use the car insurance calculator available on Bajaj Markets to determine the policy cost for your desired coverage and add-on benefits.

Lower Loan Amount

If you finance a second-hand car with a loan, you’ll need to borrow less compared to when buying a new car. This means that the EMIs will be smaller, making it easier to manage your budget. A lower loan amount also helps you pay off the loan faster, reducing the total interest you’ll need to pay over time. This makes financing a used car more affordable and less stressful.

Buying a used car requires not only choosing the right vehicle but also finding a reliable source. Here are the most common avenues to explore when purchasing a second-hand car:

Directly from the Owner

Buying directly from the car’s owner is often the most budget-friendly option. These deals usually come with no middlemen, allowing for transparent pricing and direct negotiation. 

Owners can provide firsthand information about the car’s history, maintenance, and usage. However, you may need to inspect the car thoroughly and verify the documents independently, as private sales may lack certification or warranties.

Local Pre-owned Car Dealerships

Local automobile dealerships specialising in used cars are convenient and widely available. They often stock a variety of brands and models, catering to different budgets. Many dealerships offer certified pre-owned cars, ensuring the vehicles meet quality standards. 

They may also provide warranties and financing options, making the purchase process smoother. However, prices at dealerships can be slightly higher than buying directly from an owner due to added services and overheads.

Car Manufacturer’s Used-car Division

Several automobile manufacturers in India have their own certified used-car programs, such as Maruti Suzuki True Value, Hyundai Promise, and Mahindra First Choice. These programs provide high-quality, thoroughly inspected vehicles with extended warranties and service packages. 

Buying through a manufacturer’s division ensures peace of mind, as the cars undergo rigorous checks and repairs before being sold. While these cars might be priced higher, they offer reliability and additional benefits, making them a great option for first-time buyers.

Online Used-car Dealers

Online platforms like Cars24 and CarsDekho have revolutionised the used-car market. These websites and apps allow buyers to browse through a vast inventory of pre-owned cars from the comfort of their homes. 

Many platforms provide verified listings, detailed car reports, and price comparison tools. Some also offer financing and car insurance policy options, along with doorstep delivery. However, it’s essential to verify the credibility of the platform and inspect the car in person before finalising the deal.

Auctions and Local Listings

Car auctions and local classified listings can be excellent sources for finding second-hand cars at competitive prices. Auctions, often conducted by government agencies or financial institutions, feature repossessed or retired vehicles, offering significant cost savings. 

Local listings in newspapers or community boards allow buyers to explore a variety of cars within their area. While these options may require more effort in terms of research, inspection, and negotiation, they often provide great value for those with time and expertise.

Each source has its advantages and considerations, so choose the one that best suits your budget, preferences, and comfort level. Regardless of where you buy, always inspect the car thoroughly, review its documentation, and ensure a fair price.

Purchasing a second-hand car requires thorough research and careful inspection to ensure you make a wise investment. Here’s a checklist of essential things to review before making your decision:

Verify Vehicle Identification Number (VIN)

One of the most important things to check before buying a second-hand car is the VIN. It is unique to every car and helps confirm its identity. Check the VIN on the car and ensure it matches the one on the registration documents. This step helps verify the vehicle’s authenticity and prevents buying a stolen or tampered vehicle.

Review Ownership History

If the car has had multiple owners, assess how it was used and maintained by each. More owners may indicate potential wear and tear, and understanding the history can help you anticipate future maintenance costs.

Inspect Title and Registration

Ensure the car has a clear title, meaning it has no outstanding loans or liens. Verify the registration certificate and confirm that it is valid, original, and matches the seller’s information.

Exterior Condition

Examine the car’s body for dents, scratches, rust, or uneven paint. Pay attention to panel alignments, as they may indicate prior accidents. Inspect the tyres for wear and ensure all lights and mirrors are in working order.

Interior Condition

Inspect the interior for signs of wear, such as torn upholstery, faded dashboard, or malfunctioning electronics. Check the functionality of features like the air conditioner, music system, and power windows.

Engine and Mechanical Checks

A car’s engine is its heart. Check for any unusual noises, excessive smoke, or oil leaks. Inspect the engine oil, coolant levels, and belts. If unsure, have a trusted mechanic assess the car’s overall mechanical condition.

Test Drive

Take the car for a test drive to evaluate its performance. Pay attention to acceleration, braking, steering response, and gear shifts. Listen for unusual sounds and ensure the car feels comfortable to drive.

Check the Vehicle’s History

Obtain a detailed vehicle history report to check for past accidents, service records, and insurance claims. 

Inspect the Exhaust System

A malfunctioning exhaust system can cause high emissions and reduced fuel efficiency. Look for unusual smoke or sounds from the exhaust and ensure it complies with pollution norms.

Check for Warranty

Some second-hand cars still have a valid manufacturer’s warranty. If applicable, confirm the warranty's terms and whether it can be transferred to you as the new owner.

Inspect Documentation

Ensure the seller provides all necessary documents, including the RC, PUC certificate, and any previous insurance policies. Verify that these documents are authentic and up to date.

Check Car Insurance

If the car has an active insurance policy, confirm its validity and transfer it to your name after the purchase. Alternatively, calculate the cost of a new second-hand car insurance policy to understand the added expense.

Look for Better Mileage

Evaluate the car’s fuel efficiency. A well-maintained car with better mileage can significantly reduce running costs, making it a practical choice in the long term.

Check Car Framing

Inspect the car’s frame and undercarriage for signs of damage or rust. Structural issues could indicate previous accidents or improper use, affecting the car’s safety and longevity.

By carefully examining these aspects, you can ensure the second-hand car you choose is reliable, safe, and worth the investment. Always take your time to inspect thoroughly and seek professional advice if needed

Some of the best second-hand cars in India based on reliability, cost of maintenance, comfort level, and brand value are as follows:

• Maruti Suzuki Swift

• Maruti Suzuki Dzire

• Maruti Suzuki Wagon R

• Maruti Suzuki Alto

• Hyundai i20

• Honda City

• Honda Amaze

• Honda Jazz

• Volkswagen Polo

• Volkswagen Vento

Understanding what influences the price of a second-hand car is essential for both buyers and sellers. These factors determine the vehicle’s market value and help ensure a fair deal:

Age of the Car

Older cars generally have lower resale values due to depreciation. However, if well-maintained, an older car might still command a good price.

Mileage

The more kilometres a car has driven, the more its value tends to decrease. Low mileage indicates less wear and tear, which is appealing to buyers.

Make and Model

Popular brands and models that are known for reliability and performance usually retain their value better. Less popular or discontinued models may depreciate faster.

Condition of the Vehicle

The overall condition, including the exterior, interior, and mechanical components, significantly impacts the price. Well-maintained cars with no major damages fetch higher prices.

Service and Maintenance History

A car with a consistent service record and regular maintenance is more likely to retain value. Missing or incomplete records can reduce buyer confidence.

Accident History

Cars with a history of major accidents or structural damage typically have reduced resale values. A clean accident record is a strong selling point.

Modifications

Aftermarket modifications, such as custom paint jobs or upgraded components, can have mixed effects. While some buyers value these, others may see them as unnecessary expenses.

Location and Demand

Regional demand plays a key role. For instance, SUVs may fetch higher prices in rural areas, while compact cars might be more popular in urban settings.

Fuel Type

Petrol, diesel, hybrid, and electric cars have different market demands and running costs, which influence their resale value.

Market Conditions

Factors like economic trends, fuel prices, and seasonal demand also impact second-hand car prices. For example, convertibles may be more expensive in summer than in winter.

Buying a second-hand car requires due diligence to avoid costly mistakes. Here’s what to watch out for:

Skipping a Thorough Inspection

Avoid purchasing a car without inspecting its physical and mechanical condition. Ignoring signs of damage, rust, or leaks could lead to expensive repairs later.

Overlooking the Test Drive

Never skip a test drive, as it helps identify potential issues with the car’s handling, brakes, or engine performance.

Ignoring the Vehicle’s History

Failing to check the car’s history report for past accidents, service records, or legal issues can lead to unforeseen problems after purchase.

Rushing the Purchase

Take your time to research, compare options, and negotiate the price. Rushed decisions often lead to overpaying or buying a car with hidden defects.

Buying Without Proper Documentation

Avoid purchasing a car with incomplete or fraudulent documents. Verify the registration certificate, insurance papers, pollution certificate, and any outstanding loans or fines.

Ignoring Expert Advice

If you’re unsure about the car’s condition, consult a trusted mechanic or professional to evaluate it. Their expertise can save you from making a poor purchase.

Focusing Only on Price

Choosing the cheapest option without considering the car’s condition and running costs can lead to higher long-term expenses.

Overvaluing Modifications

Don’t pay extra for modifications that don’t add value or align with your needs. Focus on functionality and reliability instead.

Neglecting Market Trends

Research the current market trends and regional demand for the specific car model to ensure you’re paying a fair price.

Overlooking Insurance Transfer

Ensure the existing insurance is transferred to your name or arrange a new policy before completing the purchase to avoid legal and financial risks.

By avoiding these common pitfalls, you can ensure a smooth and satisfactory second-hand car buying experience. Always prioritise inspection, documentation, and expert advice before finalising the deal.

With the above tips in mind, we believe that you will be able to secure the best deals when buying a second-hand car in India. Know that the process is equally exhilarating as that of buying a new car. However, there are a few additional things to check off the list before finalising the deal, such as checking the vehicle documents and inspecting the car condition. Know that buying a used car in India is safe, reliable, and will save you a fortune.

For additional security, cover your second-hand car with a comprehensive car insurance plan. You can browse car insurance plans available on Bajaj Markets and benefit from features such as cashless claim settlements, 24x7 assistance, hassle-free renewals, and more.