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How to Buy a Used Car in India?

Published on 6 Oct, 2022, 11:52 AM IST
Updated on 22 May, 2025, 11:52 AM IST
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One of the first questions that comes to mind when planning to buy a used car is, "How do I buy a used car in India?" It's a concern shared by many budget-conscious buyers today. With rising prices of new vehicles, long waiting periods, and increased road taxes, second-hand cars are becoming a popular choice across India. Whether you’re a first-time buyer, need a secondary vehicle, or simply want better value for money, a pre-owned car can be the smart solution.

But buying a used car is not as easy as it sounds. Unlike brand new cars, used cars have a history, and you have to be twice as careful so you won't regret it later. This all-inclusive article will take you through everything you need to take into consideration before making your decision.

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How to Buy Used Cars?

Buying a car from a used car dealership or an individual seller involves more than price and checking the condition. Follow this step-by-step guide:

1. Set a Realistic Budget

Your budget should factor in not only the price of the vehicle but also:

  • RTO charges (if re-registration is required)
     
  • Insurance (new or transferred)
     
  • Servicing or small repair
     
  • Additions or accessories (new seat covers, music system, etc.)

2. Clearly Define Your Needs

Before checking out options, ask yourself:

  • Do I need a car for daily city driving or highway long-distance driving?
     
  • What is most important: fuel efficiency, space, or comfort?
     
  • Do I need petrol, diesel, CNG, or electric?
     
  • Do I need an automatic transmission?

Understanding your needs narrows your choices effectively.

3. Start Market Research

Before buying a used car, it’s important to do some market research. This will help you find a car that meets your needs and offers good value.

  • Think about car models suitable for your needs and budget.
     
  • Read reviews, resale value, issues, and price of spare parts.
     
  • Compare prices on different online platforms.

4. Shortlist Cars Effectively

Shortlist 3–5 cheap and best used cars after research. Compare them on:

  • Age of the vehicle
     
  • Kilometres driven
     
  • History of ownership
     
  • Service history
     
  • Location

5. Physically Inspect the Vehicle

Even if the photos look perfect on the internet, a physical inspection is necessary:

  • Check for rust, dents, paint mismatch, and tyre condition.
     
  • Check if all doors, windows, lights, and dashboard features work.
     
  • Take the help of a mechanic for a full test, including the engine and brakes.

6. Take a Proper Test Drive

Taking a proper test drive is a key step before buying a used car. It helps you check how the car really performs on different roads and conditions:

  • Drive at least 5–10 km.
     
  • Test the clutch, brakes, gears, steering, and suspension.
     
  • Drive on various roads to evaluate real-world performance.

7. Document Verification

Ensure the following documents are original and recent:

  • RC (must be chassis number-matched and engine number-matched)
     
  • PUC certificate
     
  • Up-to-date insurance (third-party or comprehensive)
     
  • Form 35 (in case the loan has been availed and now prepaid)
     
  • Service record, warranty papers (if any)

8. Negotiate Smarter

Negotiation is an important part of buying a used car. By pointing out small problems and knowing market prices, you can ask for a better deal.

  • Use issues like scratches, worn-out tyres, or expired insurance to negotiate.
     
  • Compare prices online for similar models to justify your offer.

9. Pay Securely

Always make a secure payment when purchasing a second-hand vehicle. Make use of secure payment options such as bank transfer or UPI, and ensure a written record of all.

  • Decline cash on delivery. Use bank transfers or UPI with a receipt.
     
  • Get a signed sale agreement with ID proof copies.

10. Transfer Ownership at the RTO

Following the payment, head over to the RTO to register the ownership of the vehicle. File Form 29 and Form 30, pay the charge, and wait for 2–4 weeks for the new RC in your name.

  • Fill and submit Form 29 and Form 30.
     
  • Pay the respective fees.
     
  • It may take 2–4 weeks for your RC to be registered in your name.

Where to Buy Used Cars in India?

You can buy a second-hand car from a variety of sources. Each has its strengths and weaknesses:

1. Online Classifieds

When buying from online classifieds, here’s what you need to keep in mind: 

  • Plays you directly against private sellers.
     
  • Huge variety and price range.
     
  • Requires careful authentication to avoid fraud.

2. Used Car Dealers

Used car dealerships are widespread and convenient options for buyers.

  • Spread all over cities.
     
  • Offers warranty-covered cars.
     
  • Basic warranty offered.
     
  • Handles paperwork but might take a margin.

3. Online Used Car Platforms

Online used car platforms that provide a modern, hassle-free buying experience:

  • End-to-end online buys with delivery and return terms.
     
  • Cars are inspected, papers are inspected.
     
  • Slightly more expensive but safe and trouble-free.

4. Authorised Brand Outlets

Authorised brand outlets that offer trusted options for used cars:

  • Authorised showrooms with certified, multi-inspected cars.
     
  • Generally, provide a guarantee and service assistance.
     
  • Fewer choices but faith.

5. From Friends, Relatives, or Office Network

Buying from friends, relatives, or your office network comes with its own advantages and precautions:

  • More faith.
     
  • Facilitates bargaining.
     
  • But documentation must be professionally executed.

Advantages and Disadvantages of Buying a Second-Hand Car

It makes sense to weigh the pros and cons of a second-hand car before buying one. While the cost is the major advantage, used vehicles also carry dangers that need to be handled carefully.

Advantages of Used Vehicles

The following are some benefits of selecting a used car:

1. Better Value for Money: You can buy a top-end variant or a bigger car within your budget, which is not possible with a new car if your budget is on the lower side..

2. Less Insurance Expense: Older cars have lower Insured Declared Value (IDV), therefore, insurance is cheaper.

3. Less Depreciation: Old cars have already lost most of their value, therefore, their resale value won't decline quickly.

4. Ideal for New Drivers: Since you are learning, therefore, you won't mind scratches and dents.

5. Eco-Friendly: Reusing cars saves manufacturing requirements and carbon emissions.

Disadvantages of Buying Used Cars

Buying used cars from a used car dealership or individual sellers has several drawbacks, even though they can save you money. The following are the primary drawbacks to consider:

1. Hidden Damage History: If not purchased from a reliable source, concealed accidents or water damage could be a worry.

2. Maintenance Expense: Second-hand cars might need part replacements and service more frequently.

3. Outdated Technology: Safety features such as airbags, ABS, and audio systems might be absent.

4. Lesser Warranty or No Warranty: You might not receive warranty coverage unless purchasing from an authorised dealer.

Things to Check Before Buying a Second-Hand Car

Here are the things to check before purchasing a used car:

1. Engine Health: Start the engine and listen for any knocking or unusual noise. Also, check the exhaust for smoke. Blue or black smoke is a warning sign.

2. Odometer Reading: Check the odometer for signs of tampering and compare it with the service history to estimate the car’s actual usage.

3. Tyre Condition: Uneven wear and tear on the vehicle's tyres or parts can be dangerous. It increases the risk of accidents by affecting handling and stability.

4. Suspension and Brakes: Push the vehicle down to check for suspension bounce, and test the brakes on different surfaces during the drive to assess their effectiveness.

5. Air Conditioning and Electricals: Make sure all lights, indicators, windows, AC and wipers are functioning properly. This ensures safety and smooth operation while driving.

6. Underbody and Chassis: Carefully inspect the vehicle's underbody for any signs of rust or dents. These can indicate past damage or potential maintenance issues.

Things to Avoid When Buying a Second-Hand Car

To save yourself hassles down the line, here's what not to do:

1. Don't Hurry the Purchase: Give yourself enough time to thoroughly compare options and inspect every detail carefully. Rushing can lead to overlooking important factors.

2. Avoid Verbal Agreements: Always get a written contract and receipts for every transaction. This protects you legally and ensures clarity on the terms agreed upon.

3. Don't Avoid RTO Transfer: Driving a vehicle that isn’t registered in your name can lead to serious legal complications. To avoid future hassles, it’s best to ensure the car is properly transferred.

4. Avoid Overlooking Service History: Irregular servicing is a clear sign of poor maintenance and can lead to costly repairs down the line. Always check the service records to ensure the vehicle has been properly cared for.

5. Avoid Heavily Modified Cars: Vehicles that have been altered or modified can run into problems with insurance claims and RTO regulations. It’s crucial to verify that any modifications are legal and properly documented to avoid future hassles.

Factors That Impact Used Car Prices

Understanding what impacts price can help you negotiate better:

1. Popularity of the Brand and Model: Models like the Maruti Swift, Honda City, and Toyota Innova are known to retain better resale value compared to others. Choosing these can help you get a higher return when it’s time to sell your car.

2. Vehicle's Age: On average, a car’s value drops by about 10–15% each year, reflecting typical depreciation over time.

3. Kilometres Driven: Low mileage typically indicates less wear and tear on the vehicle, often indicating better overall condition.

4. Condition and Maintenance: A well-maintained car with no accident history usually commands a higher resale value, reflecting its reliability and care.

5. Location: Metro cities typically have higher vehicle prices and charges compared to smaller towns due to greater demand and cost of living.

6. Transmission Type: Automatic cars often come with a higher price tag, especially as their popularity continues to rise.

7. Number of Previous Owners: Cars with a single owner typically command better prices compared to those with multiple previous owners.

Why Consider Buying a Used Car?

Buying a second-hand vehicle is not merely saving money. These are strong reasons why it is worth doing so:

  • Budget-friendly: Best for students, middle-class families, or occasional users.
     
  • Lower risk: Lower depreciation and reduced loss of funds if sold later on.
     
  • Good starter car: Learn to drive without the worry of damage.
     
  • Upgrade possibilities: Choice of driving larger or luxury cars within your means.
     
  • Wider market: India boasts a growing organised used car market with thousands of listings.

Frequently Asked Questions

Here are some of the most common question and their answer related to Buying a used car

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What is the safest mode of purchasing a used car in India?

The safest and best mode is through authentic websites or authorised dealers, where the cars are inspected and paperwork completed professionally.

Can one obtain a loan for a used car purchase?

Yes, several banks and NBFCs offer loans for old cars. Interest rates are a tad higher, though, compared to new cars.

Can I buy a car that is registered somewhere else?

Yes, absolutely legal, provided you get it re-registered in your state and re-pay road tax, unless the seller has already done it.

What is an ideal mileage for a used car?

40,000 to 60,000 km would be acceptable for a 3–5-year-old car. Avoid cars with extremely high or extremely low mileage (likely tampering).

How do I transfer ownership of a used car?

Submit Form 30 and Form 29 along with the RC, insurance, PUC, and ID proofs to the local RTO. The owner’s name will be changed within 2–4 weeks.

Explore More:

Best Time to Buy a Car in India

Best cars for first-time buyers in India

How to buy a car through ACKO Drive?

How much to spend to buy a car in India?


Disclaimer: The above content is for informational purposes only. It is recommended to take the help of an expert before making any related decision.


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