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Hello

What is the procedure to buy a second hand car in chennai. I had nailed down a car and given a token advance to the selller. He has some loan on the car. Broker and the seller told me to first pay off his loan and take a no objection certificate and pay the remaining money to the seller. Till this process is complete i won't have positionof the car. if someone else gone thru similar scenario can you please post it and help me out on this

thanks
srini

AFAIK, in bangalore, its the sellers job to pay off the loan and get the NOC. they're just gettin you to do the dirty work. i think these guys are takin you for a ride...

i 2nd NIP. it just does not sound right. be it bangalore or chennai. it is a simple money dealing.

you will have nothing to do with his loan.

for eg., in my case all i did was give the agent (i had to chose this agent as this particular car was the best in my 2-month search) an advance of 10K and the rest of it was paid to him in 2 days by DD.

he gave me the car keys right then and i drove out of his premises with the papers in the old owner's name still.

EDIT: i was given a sale deed on stamp paper as proof of sale until i got my papers in hand.

i got my papers including NOC, RTO transfer, RC book and insurance transferred in my name and delivered at my home in 3 days flat.

so take care.

You should have taken the possession of the car when you cleared his loan with the sale deed paperwork completed.

What if he refuses to handover the car now ??

In some cases the owners ask the buyers to close the loan as they dont want to run around to source the money for closure.

Pay the amount (minus loan), get all the transfer papers signed by the seller, visit the bank along with the seller and close the loan (check for pre-payment penalty, if any) & get a payment advice. I guess generating "NOC" will take some time. Take the car and ask the owner to advice once he gets the NOC.

Put every transaction clearly in a paper and get it signed by him (please ensure that you're dealing with the person in whom name the car is registered)

Any issues with the above model?

Get the papers to be submitted to the RTO signed by the seller first. It is the sellers' obligation to get the NOC from the financier. An NOC from the financier is a must to get the regsitration transfered to your name. IMO, nothing to worry if the registration continues in the seller's name if you have some paper - like a sale letter (in the prescribed form) or a sale deed or its copy in your possession.

The most crucial document (to protect YOU in case of a liability arising out of accident, etc) is the insurance. Just remember to pay a nominal amount (25 or 75 rupees) to the insurance company and have the insurance transferred to your name. I do not think the insurance co will ask for any formalities for that except to see the sale letter, and originals fo the RC. Again, it is not necessary to have the vehicle transferred at the RTO to your name in order to have the insurance in your name.

Make sure you check if there are any prepayment or foreclosure charges for the loan. Those should be paid by the seller and not included in the price of the car.

I recently sold my car which I had bought on a loan. I did all the work of getting the NOC from the financier and removing the hypothecation from the vehicle RC book.

When the buyer gave me the DD, I gave him the NOC, signed RTO transfer papers and the original vehicle papers. I kept a copy of everything and an original copy of a document stating that I had sold the vehicle to him.

You should not have to run around to get the seller's loan cleared.

I sold a car with some unpaid loan left in it. I took an advance of the loan amount from the buyer, pre closed the loan, got the NOC from the bank & handed everything over to the buyer along with the other papers & the car. The whole process took 3 days.

Whats the loan amount and the sale price?

unpaid loan was close to a Lakh. sale price was 2.6L.

Probably you would have sold that car to someone from known sources else you would have signed the transfer papers to them. If 'no' for the above two, youre a very trustworthy seller from the eyes of the buyer.

I know few deals got canceled due to the above problem, both of them stand on their grounds to safeguard the transactions.

I have a few queries here.

1) What if the owner has some other bad loan with the same bank? Will the bank give a NOC for this car loan even if it is paid in full on behalf of the seller?

2) Until the NOC is got can the car be transferred to the new Owner in RTO?

3) If the car cannot be transferred, the new owner cannot get an insurance on the car (supposing the original owner is not transferring the insurance) - so he will be running the car without any cover?

4) What if the owner does not hand over/ misplaces the NOC once he gets it?

Please clarify - i am in the same situation.

My replies to your query inline

Thanks a lot Surprise!