Checklist of Documents for Buying a Used Car (Second-Hand/Pre-owned Car)

India represents one of the world’s largest car markets. Easy availability of finance and rising income levels are encouraging the middle class population to upgrade their two wheelers to a car.

The demand for used cars (Pre-owned cars) is also on the rise in India. The used cars market has been growing at an estimated CAGR of 16% for the last few years.

“A used car now sold for every new car purchased in India” –  Frost & Sullivan (2014-15)

Though the used car industry in India is dominated by un-organized players, the market dynamics have been fast changing over the last few years. The entry of organized players in Used car segment have certainly boosted the used vehicle market in India.

Most car-makers have developed a branded used car business that allows customers to buy pre-owned cars certified by original manufacturers and backed by warranty.

Some of the popular vendors of used cars are as below;

• Maruti True Value
• Hyundai’s H Promise
• Mahindra First Choice Wheels
• TATA Motors Assured
• BMW Premium selection
• Mercedes ProvenExclusivity
• Chevrolet Certified
• Honda Auto Terrace
• Ford Assured
• Toyota’s U Trust

So, while purchasing a second hand car, what documents should be checked? In this post let us go through some of the important documents that you should check when buying a Used car in India.

Documents to check while buying a Second-hand Used Car

 A pre-owned car can be bought from an individual owner or Pre-owned Car Dealer or from a Car company. Whoever might be the seller, it is advisable that you get the below important documents to avoid any problems or penalties in the future.

Registration Certificate:

• • The Registration Certificate is the most important document and provides all the important information about the car like Chassis number or VIN (Vehicle Identification Number), Registration number, Engine number, owner name etc.,
  • Kindly note that the older cars will have the RC book, while the slightly newer ones have RCs as smart cards.
  • Any changes like the engine or color has to be updated on the RC as well.
  • If cars are fitted with CNG sets, double check if CNG is mentioned on RC and Insurance papers.
  • When you’re purchasing a used car, don’t forget to ask how many owners it has had. You can check this very easily on RC Smart Cards as in the below image. When getting the car transferred, you will have to make the ownership changes on the RC under your name. On the smart card, you will have to get the O.SL.No. (Owner Serial Number) updated to No. 02, indicating that you are the second owner of the vehicle.
  • Check the state in which the car has been registered. If you are planning to use it in another state, you will have to get it registered there only.

Car Insurance Papers :

• • The law mandates that every owner of a motor vehicle must have one automobile insurance policy. You can get the insurance transferred from the current owner to your name.
  • You can check with the insurance company about the previous claim history (if any). This can help you to know if the car was involved in any accident.
  • Check if the insurance is a Third party only insurance or a Comprehensive one. If it is TPI only, it is better you buy a new Package policy. You can also buy a totally fresh policy in your own name (this is the best option).
  • In case if you already have a car insurance, you can transfer that from your old car to the new car (the one which you are planning to buy).
• Get the car’s ‘Original Purchase Invoice’ from the Pre-owned cars dealer or from the auto company. If you are purchasing the car from an individual owner, you can ask for a ‘Original Sale receipt’ which is duly signed by him/her.
• Road Tax Receipt – The owner of the car should have paid the Road tax when registering the vehicle. This is a onetime payment. So, you just need to ensure that the seller provides you the Road tax paid receipt (original one).
• If the owner or dealer has ‘car service book’, do go through it. The service book generally will have the details about ‘service schedule ‘and can give you a fair idea about the condition of the vehicle.
• If the car has been modified to run on two types of fuels (like LPG & petrol), ask for the original sale receipt of the installation. Ideally the car should have the ‘dual-fuel certification’ and NOC (No Objection certificate) from the RTO (Regional Transport Office).
• If the previous owner has taken a loan to purchase the car, ask him/her a copy of the NOC from the finance company, stating that the loan has been cleared. You should also ask for a copy of Form 35 which is duly signed by the financier & the previous owner. (Below is the Form 35 template. Click on the image to download Form 35)
• Pollution certificate: Ask for a valid Pollution under Control (PUC) certificate.
• Ask for other documents like Owner’s manual & Warranty papers (if any).

Even if you are buying a second-hand bike or any other motor vehicle, most of the above documents are relevant and need to be checked.

If you are buying a Second hand used car from an auto company, most of the checks and documentation work might have already been done by the company itself. But it is always good to double-check if all the documents are in place or not.

(Image courtesy of bplanet at FreeDigitalPhotos.net)