The second hand car market in India has witnessed a major boom over the last decade. But have you ever wondered why are more Indians choosing to buy a second hand car than a brand new one? Hold your horses because you will get the answers to all your questions here. Take a look below to find out why people are choosing to buy second hand cars over new cars:
The biggest reason why people choose to buy a second hand car over a new car is money. Used cars can be purchased at a lower price as compared to their brand new counterparts. This happens because the cost of a second hand car accounts for depreciation, thereby reducing the overall cost of the car. However, there would be no depreciation in the value of a brand new car and thus, it will come expensive. The more the age of the used car, the more will be the depreciation and lesser would be its market value.
One of the advantages of buying a second hand car is that you can afford to buy an expensive car model which would otherwise not fit into your budget. Since used cars are available for lower cost, higher-end car models can be purchased for a lesser cost even though their brand new counterparts would still go beyond your budget. For example, let’s assume that your budget allows you to afford a Hyundai i10 but if you go for second hand cars, you can also afford a bigger car, such as a Ford EcoSport. Therefore, second hand cars allow you to upgrade to an expensive car model without paying more than you intend to.
Driving a second-hand car is more relaxing than a brand new car. This happens because you are more likely to get stressed about denting or damaging your new car as compared to your used car. Second hand cars are low maintenance and a scratch on its body will not summon a heart attack as opposed to the case of a new car. Thus, people worry less while driving a used car.
Depreciation in the value of a car goes hand-in-hand with its rising age. However, a second hand car depreciates at a slower rate as compared to a brand new car. A used car has already faced its share of faster depreciation during its early year and thus, faces lesser depreciation in its later years.
A few years back, people hesitated more in buying a second hand car as the chances of getting duped or cheated was more. But today, several authentic used car dealers in India can help you buy a certified second hand car. These dealers thoroughly check the vehicle and sell it at a fair price depending on its condition. As a result, people are able to get the best deal on a used car without getting cheated.
Similar to buying a second hand car, used car insurance can also be purchased at a lower price. This is because the overall value of the car reduces and consequently lowers the Insured Declared Value (IDV) of the car. With lower IDV, the price of a second hand car insurance is also less. Therefore, you end up paying less for your used car insurance than buying car insurance for a new car of the same model.
Now that you have decided to buy a second hand car for yourself, you must keep a few things in mind. Following are some of the things that you should do while buying a second hand car:
Before you take the delivery of a second hand car, you must check if the car is in the exact condition as claimed by the seller. The used car that you are buying should be in good condition and value for your money. There is no point of buying a second hand car that needs to be repaired every now and then. Thus, get the car thoroughly checked by a trusted mechanic and take a test drive of the car before going ahead with the purchase.
While buying a second hand car, you must carefully go through the car’s registration document. The serial number on the car’s registration certificate or smart card can be used to find out if the seller is the actual owner of the car and how many times the car has been sold in the past. Moreover, you must remember to take all the car-related documents from the seller, including the car’s original bill, car ownership transfer forms (RTO Form 29 and Form 30), NOC from the car loan provider (Form 28) and the payment receipts for road tax.
Before you buy a second hand car, remember to go through the car insurance policy of the car and check the insured declared value (IDV) and claim history. The IDV will be essential in finding out the present market value of the car and you can ensure that the seller is not trying to sell you the car on a higher price. The claim history, on the other hand, can come useful to know how many times car insurance claims have been made. More number of claims in the last few years mean that the car has been frequently damaged and you may have to pay more for its maintenance and repairs after purchase.
Before finalizing the purchase of a second hand car, find out if you can get the car modified as per your choice. For example, if you want to install a CNG fuel kit installed in the car, you must check before buying if it’s possible to do so. There is no point buying a car which you cannot modify as per your liking and thus, you can choose to buy some other car.
While buying a second hand car, you must ensure that the Registration Certificate (RC) of the vehicle is transferred to your name before you make the final payment. The transfer of ownership of the used car becomes effective once the RC of the car has been transferred to the new car owner’s name. The transfer has to be made by the seller by filling RTO Form 29.
Apart from the RC of the second hand car, you must also get the existing insurance policy for the car transferred to your name. As per India’s motor laws, all new and used cars need to be covered under a car insurance policy with at least a third party cover. In case the car seller has an ongoing car insurance policy, you can get it transferred to your name and share the premium for the remaining policy term. However, the No Claim Bonus earned by the car seller is not transferable. If the previous policy of the car has expired, you will have to purchase a used car insurance policy.
In a Nutshell
Owning a car is a wonderful feeling and if you get a high-end used car model at a lesser price, there is nothing like it. But as a buyer, you must try to get the best deal and the full value of the second hand car. Thus, you must keep the above-mentioned tips in mind to get a second car of your choice in perfect condition and at a good price.
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