ARTICLE: How to buy a *USED* Car in India

[CrackedHead]

I've been looking for a Palio 1.6 and found one with Mahindra First Choice - The deal is finalized but there's a slight glitch.

The owner is not in town (but the forms have been signed and kept with his brother). The Mahindra First choice people are insisting that I make a payment by DD/Cheque in favor of the owners brother!

Mahindra first choice will issue me a letter on their letterhead stating that I have bought the car from them. I smell something fishy and am insisting that I will make the payment only in the name of the registered owner of the vehicle and not in his "brother"s name.

The "brother" has an authorisation letter from the registered owner allowing him to sell the car. What should I do ?

[CrackedHead]

^^^

Or - its possible that this "brother" who's selling me the car to me is someone who purchased the car from the first owner and kept the signed transfer forms without registering it to his name - he is now trying to sell the car to me as a single owner vehicle.

Is there any way to verify that this is not the case here? Or should I walk away from this Palio 1.6 (which is otherwise a good buy) ?

[GTO]

Originally Posted by CrackedHead

The owner is not in town (but the forms have been signed and kept with his brother). The Mahindra First choice people are insisting that I make a payment by DD/Cheque in favor of the owners brother!

Payment to be made ONLY in the name of the registered owner.

Originally Posted by CrackedHead

Or - its possible that this "brother" who's selling me the car to me is someone who purchased the car from the first owner and kept the signed transfer forms without registering it to his name - he is now trying to sell the car to me as a single owner vehicle.

Probable situation. Easiest way to check : Are the last names the same?

[CrackedHead]

Originally Posted by GTO

Payment to be made ONLY in the name of the registered owner.

Yes - that's what my stance is. But, Is making a payment in favor of Mahindra First Choice an option ?

Originally Posted by GTO

Probable situation. Easiest way to check : Are the last names the same?

No - they are not. Which is what raised the red flag for me in the first place.

I was thinking of asking this "brother" to produce any original ID/address proof of the registered owner tomorrow. Should be easy for him if the he really his the owner's brother.

But, if the "brother" admits that he's indeed the second (un-registered) owner then should I still pursue the car with a suitable reduced offer ? I've already had the car checked by my mechanic and the car passed the test.

[venkman]

The title "On how to buy a used car in India" leads one to think that these are the tips to buy a used Car. I write this also because I cant figure out the real issue, if the last names of the said brothers were nowhere close then is a Palio worth the mileage being given to it.

[venkman]

Also note that this maybe a tactic to charge more than the amount the actual owner is looking for. This way the difference in amount may be shared and everyone is happy

[CrackedHead]

Originally Posted by CrackedHead

Yes - that's what my stance is. But, Is making a payment in favor of Mahindra First Choice an option ?

^^^
Anyone have any opinion on this? I won't get any warranty or any other benefits but the paperwork will atleast be in order.

[GTO]

Originally Posted by venkman

The title "On how to buy a used car in India" leads one to think that these are the tips to buy a used Car.

Lots of tips if you look at the First Page

Originally Posted by CrackedHead

^^^
Anyone have any opinion on this? I won't get any warranty or any other benefits but the paperwork will atleast be in order.

I don't see a problem in writing the check to Mahindra First Choice as, it is part of a reputable business group (and is indirectly taking liability) as long as you get a letter from them recording the sale (and that you have bought the car via MFC).

[Digital Vampire]

I'm very close to inking a deal for a used car but have the following queries.


1) The loan on the vehicle was finished recently and the seller has the NOC from the bank indicating loan closure. However the seller has not removed the hypothecation clause from the RC book yet.
- Can I get the hypothecation removed with the NOC from the bank along with the transfer of ownership to my name?
- Or should I insist the hypothecation removal be indicated in the RC book before the sale happens. (takes ~ 1 Week more)

2) The car has 9 months of comprehensive insurance remaining till the next premium renewal. What are the formalities to transfer the insurance to my name?

3) The transaction is within the state but between different cities and obviously different RTO's. Is there any special forms/NOC required in this case?

4) The RC book shows 3 transfers already but I verified that all are in the same person/company name. The seller claims this has happened because of multiple address changes. I'm wondering how the transfers are recorded when address changes. Would I be recorded as the 4th owner whereas I should be the 2'nd owner.

[GTO]

Originally Posted by Digital Vampire

1) The loan on the vehicle was finished recently and the seller has the NOC from the bank indicating loan closure. However the seller has not removed the hypothecation clause from the RC book yet.
- Can I get the hypothecation removed with the NOC from the bank along with the transfer of ownership to my name?
- Or should I insist the hypothecation removal be indicated in the RC book before the sale happens. (takes ~ 1 Week more)

As long as you have the NOC, removing hypothecation is a very simple RTO procedure. You can take care of it at the time of transferring it your name.

The car has 9 months of comprehensive insurance remaining till the next premium renewal. What are the formalities to transfer the insurance to my name?

Approach insurance company with form.

The transaction is within the state but between different cities and obviously different RTO's. Is there any special forms/NOC required in this case?

For this, and the previous question, look up the list of documents from this article (ARTICLE: How to sell a *USED* car in India).

4) The RC book shows 3 transfers already but I verified that all are in the same person/company name. The seller claims this has happened because of multiple address changes.

Only address change = same owner. If this is indeed the case, then you would be the second owner. However, if the car has been transferred between different individuals (even if the same company), then you will be the 4th owner.

[gkrishn]

Originally Posted by GTO

As long as you have the NOC, removing hypothecation is a very simple RTO procedure. You can take care of it at the time of transferring it your name.

NOC from banks are little tricky. They are time bound, at least in the case of abn amro my experience was like that. The NOC expired in 3 months and i had to pay freaking 350rs to get a new one

[Digital Vampire]

Thanks for those really helpful hints!

Though it may be obvious for many, I'd like to add the following points.

* If you are buying a used vehicle whose insurance is paid in another city, be prepared to travel to the very same branch office of the insurance company to transfer the full insurance to your name. I don't know whether this convoluted practice is true for private insurance companies as well, but this is the case at least with many of our nationalized insurance companies. Though the transfer of insurance can be affected by sending the documents via registered post, it may involve lots of delays.

* The NCB enjoyed by the previous owner will not be transferred to you for obvious and valid reasons. So when the insurance is transferred to your name, be ready to shell out the pro-rated premium NCB discount amount which the company originally waived off for the previous owner since the transferred insurance is treated like a brand new insurance with zero NCB.

* You will be eligible for NCB waiver only after completion of 12 months from the date of insurance transfer. Your next premium renewal would be due before that and even that will not benefit from NCB waiver.

* Depending on the number of months remaining on the purchased vehicle's insurance, it may just be easier and better to buy a fresh insurance keeping in mind the NCB benefits. Do your own math to see what works best for you.

[mkh]

Having bought only used cars till now, here is my experience
1. Always go to end user, dealers are only interested in sale, you buy crap or whatever, they hardly care. Unless you go to true value or company operated second hand sales. Also Mahindra First Choice is a good option.
2. You need to know people in the service/sales to get a good eval. Like i have been a hyundai cust so i prefer to buy used hyundai as i can take it to the service guy and get it evaluated for free. Also can get the service hist out by just the number. My first 2 cars, i had a terrible time to get a mech to see and understand its value
3. Best option for people who know nothing much- get into company websites(s/s cos) and there are many techies who are selling cause they are moving abroad. If you are lucky you will get a guy who just has to sell and cannot deport the car to his native so you may get a great deal as its genuine sale. Bangalore has them aplenty( just came across 7-8 i-10's in the last 10 days..missed a great deal today:(, anyways going for a new one)

Patience is needed and one rule always rem my friends who are getting into buying a used car
If you find a good one, genuine- DO NOT HAGGLE, pay a premium of 5-10K and get it. Over the next 3-4 years it will NOT MATTER to you, give the seller his due.
I have seen people haggle over a few 1000's and lose out on a great car, not worth the time and energy. I paid 15K more for the getz, 10K more for the santro but i never regretted as i got a genuine and great car.
Hope this helps.