When considering a used car to purchase, the checklist of things to be aware of is not a terror-inducing catalog. To know used cars’ past more efficiently, one needs to consider manufacturing practices, improvements in records like insurance write-offs, previous owners, etc.
Purchases of pre-owned vehicles are more attractive than ever before. Some buy a used car due to budget constraints, and some want to avoid public commute due to the effects of the pandemic, while others may want to improve their driving skills before purchasing a new vehicle. For such reasons, the used car industry is growing daily. The Indian used car financing market is expected to grow at a CAGR of around 11% and is anticipated to reach around US$16 billion by FY2027. To meet the increasing demands, NBFCs offer easy second hand car loan at attractive interest rates.
Here is the due diligence and a checklist to help you buy your car confidently.
1. Consider the Age of the Vehicle
Generally, after a few years, vehicles might need repairs. Its maintenance cost might also increase. It may be that the car has not been used to a great extent, but it was manufactured years ago. So, there will be a depreciation loss. Also, you may face issues finding its parts if they need to be replaced in the future. The newer the car, the better it is.
2. Inspect the Car’s Condition Thoroughly
Things might seem normal from the outside, but you need to go through minor details to make a purchase decision for a used car. It will be helpful if you know the technical aspects; otherwise, you can seek help from a trusted mechanic regarding the exterior, engine, and other parts. You will come to know if it is worth the price to pay.
- Inspect the engine thoroughly. Check if there is any leak.
- Discuss the mileage.
- Look at the upholstery, front and back seats, and tears or stains on the car’s interior.
- Authenticate the functionality of the music system, etc.
- Watch out for undercarriage, car framing, rusting, and paint damage.
- Check for the uniformity of the tires regarding wear and tear costs.
3. Go for a Test Drive
It is necessary to test drive the car to get a lot of insights related to its performance. Driving the vehicle for a considerable amount of time is required to understand its acceleration and suspension.
4. Ask for Service Records
It will be helpful for you to buy a car with well-maintained servicing records. Talk with the seller about the vehicle’s maintenance history in detail. You will know how often the seller visits the service center and for what type of service.
5. Check Registration Certificate
No matter what, verify the authenticity of the car’s registration certificate and whether the certificate is original. If the certificate is a duplicate, check the mark of DRC and check the DRC status, and know where the car was registered. Check the owner’s name on it, details like engine number, chassis number, etc. Ensure that you check other papers also, including the original invoice of car purchase, road tax receipt, and a NOC from the car loan provider. The seller needs to submit the RTO Forms 28, 29, and 30 to transfer the ownership and receive the NOC.
6. Used Car Financing Option
Whether it is purchasing a new car or a used car, it is a major expense. You can plan it with a loan for used cars instead of waiting for years to save the entire value of your dream car. Look for a lending institution offering a high loan amount of the car’s IDV value.
You can consider an NBFC offering the used car loans with the following features:
- A small amount as the down payment can make a used car loan pocket-friendly.
- A lender may offer a pre-owned/second-hand car loan value of up to 95% of the car’s IDV. Muthoot Capital can provide used car loans up to 100% LTV for specific models under specific schemes.
- There should be a flexible repayment tenure option to repay the car loan in easy EMIs and keep you away from financial burden. A lender allows you to choose from 12-60 months for the loan tenure.
- A lender should offer used car finance at a competitive rate. Muthoot Used car loans start from as low as 8.50%.
- The lender should offer a used car loan against minimal documentation to make the process hassle-free and quick.
This will help you to be attentive while pursuing used car options and finance it affordably.
