Buying a Used (Second-hand) Car in India: A Complete Guide

Published on 6 Oct, 2022, 12:16 PM IST
Updated on 7 Jul, 2023, 11:08 AM IST

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Buying a second-hand car can be a viable option, especially for first-time car owners restricted by their budget. But second-hand/used/pre-owned cars have their share of advantages and disadvantages, and you must be aware of them to make an informed decision. Here's a complete guide to buying a second-hand car in India to help you out.

Buying a Used Car

Is a second-hand car worth buying?

Buying a second-hand car is worth considering for the value for money it offers. However, before buying, you should ensure that the vehicle is in good condition, well-maintained and free from any major issues. If these criteria are met, then buying a used car can be worth it, as it costs significantly less than a brand-new car.

But being cautious is extremely important while buying a used car. Before making the purchase, one should be 100% sure about the vehicle’s condition and the authenticity of the documents. All-in-all, a used car makes sense, considering the fact that a car is a depreciating asset.

Advantages and disadvantages of buying a second-hand car

Buying a second-hand car can save a lot of money, but it has its advantages and disadvantages. In this section, let’s discuss the benefits of buying a used car and the downsides of the same.

Advantages of used cars

Here are the advantages of buying a used car.

1. Lower price tag

One of the most significant advantages of used cars is the price tag. In other words, a 2nd hand vehicle will not drain your savings. With a lower price tag compared to a new car (it could be lower by 50%), you can also go for a better variant or a bigger car without shelling out a lot of money. Affordability is one of the main benefits of used cars, and that’s why they are a beneficial proposition.

2. Slower rate of depreciation

One of the biggest disadvantages of buying a new car is the high rate of depreciation, and the same fact works in favour of a second-hand car. Yes, a used vehicle loses its value way slower than a brand-new vehicle.

For instance, a new car’s market value decreases as soon as it is driven out of the showroom. It loses most of its value in the first three years. Whereas a second-hand car comparatively depreciates at a lesser pace, and you can get a better resale value if you wish to sell the vehicle, provided it is in good condition.

3. Lower car insurance premium

As mentioned earlier, a used car costs way less than a new car, and the car insurance premium is calculated based on the vehicle’s age and market value. Hence, a second-hand car attracts a lower insurance premium.

4. Lower loan amount

If you wish to buy a used car on loan, the loan amount or the borrowing amount shall be lower due to the vehicle’s lower price tag. Hence, your EMIs (Equated Monthly Instalments) will be low compared to EMIs for a brand-new car. That means you can buy a used car without any financial hassles, as you can easily avail of a car loan with affordable interest rates.

Disadvantages of buying a used car

Following are the disadvantages of buying a second-hand car.

1. Not reliable as a new car

One of the biggest cons of purchasing a used car is reliability. Typically, second-hand cars are less reliable compared to brand-new cars. The older the vehicle, the more you spend on maintenance, repairs and parts replacement. That's why you should thoroughly check the vehicle's condition before making the purchase decision.

2. No warranty coverage

If you buy a used car from an individual, you may not benefit from warranty coverage unless the previous owner has purchased an extended warranty package. Generally, you will not enjoy the benefit of a manufacturer-offered warranty while buying a second-hand car from an individual.

3. Limited options

The options are limited when you are on the hunt for a second-hand car. Whereas when you buy a new car, you have a plethora of options at your disposal. For example, if you are looking for a particular variant of a specific model, you may not find it in the used-car market. Sometimes, you may have to settle for what’s available in the 2nd-hand car market rather than buying a vehicle of your choice.

4. Old technology and features

Car manufacturers keep updating the technology and features of their vehicles. So, buying a second-hand car means you will miss out on the latest technology and features. For instance, a new car may have the latest and advanced safety features, whereas a used car may not. 

How to buy used cars in India

The following points explain the process of buying a used car in India.

1. Finalise the budget

Before beginning your used-car purchase journey, the first thing to do is to finalise the amount of money you are willing to spend. In other words, finalise the budget for the purchase before you check out the cars. That makes it easier to shortlist the potential options.

If you purchase the vehicle through a loan, check if you have a pre-approved loan. If not, you can contact the financial institutions/banks to check the eligibility and documentation process to get a loan. It helps speed up the process once you have made a purchase decision.

2. Select the car

Once you know how much money you are going to spend on a used car, the next step is to zero in on a particular body type and model. Depending on your budget, you can decide whether you want to buy a hatchback, sedan, SUV (Sports Utility Vehicle) or MUV (Multi Utility Vehicle)

Also, consider your requirements while choosing the vehicle. For instance, it makes no sense to buy a hatchback if you are looking for a car for a family of 6 people. Hence, make your choice depending on the budget and requirements.

Also, read: Best Family Cars in India

3. Explore buying options

Once you have zeroed in on a car, the next step is determining the buying option. You can buy a second-hand car from an individual, local pre-owned car dealers, online used vehicle dealers, online classifieds or through the car manufacturer’s 2nd hand car dealerships. You can choose which option works best for you. We will discuss this in detail in the following sections of this article.

4.  Test drive the car

Now you have found the car of your choice, the next critical step is the test drive. Take the vehicle for a relatively long drive to check every aspect of the car. It's not only about the engine; check the brakes, suspension, gearbox, steering, fluid levels, interior, etc. Choose the vehicle only if you feel comfortable and confident with the car's condition.

It's better to take the vehicle to a trusted mechanic for a thorough car inspection to be on the safer side. It will help identify any issues you would have missed while driving the vehicle.

5.  Check the documents

Once you are happy with the car, you can move ahead to verify the documents. Check the vehicle’s Registration Certificate (RC), car insurance certificate, PUC (Pollution Under Control) certificate, road tax payment receipt and NOC (No Objection Certificate) issued by the bank/financial institution if the car was purchased on loan.

6. Complete the payment

If you find everything is good to go after document verification, you can make the payment for your used car. 

7. Ownership transfer

The last and crucial step in this purchase journey is the transfer of ownership. Since you are buying a pre-owned vehicle, it is essential to transfer ownership. Obtain all the necessary documents from the vehicle seller/dealer and apply for ownership transfer at the RTO. Once the process is complete, you are “officially” the car's owner. Congratulations!

Also, read: Tips for buying a car the smart way

Where to buy used cars in India?

Now, you know how to buy a second-hand car, but where do you find them? This section provides a deep insight into the used-car buying options in India.

1. Directly from the owner

You can buy a used car directly from the owner. However, it is a cumbersome method as you need to have the time and patience to inspect the vehicle with the help of a mechanic. One advantage of this method is that you can bargain for the best price. But, you may not benefit from warranty coverage if you buy it from the owner.

2. Local pre-owned car dealerships

Buying a used car from a dealership is convenient as you need not hunt for a second-hand car. You will have all the options lined up at your disposal. However, consult a mechanic to ensure that the vehicle is free of issues. You may also get a limited warranty coverage if you buy a second-hand car from a dealership.

3. Car manufacturer’s used-car division

Several car manufacturers have their pre-owned vehicle divisions. It is much safer to buy a second-hand car from an OEM (Original Equipment Manufacturer) dealership as it has warranty coverage. The only downside is that these used cars may be a tad expensive compared to the regular market price.

4. Online used-car dealers

Buying a second-hand car online can save you a lot of time and money. Moreover, they are reliable, trustworthy and transparent. Cars also undergo a quality inspection; hence, you get a vehicle in good condition. They also provide a warranty, and some dealers offer a buy-back option. Online retailers also assist you with car loans, providing an end-to-end solution for a used car purchase.

5. Online classifieds

You can also buy a used car by going through the online classifieds. There are several online classified platforms to check out second-hand vehicles. Another advantage of this mode of purchasing is that you can directly contact the vehicle owner. However, the information on such platforms cannot be entirely trusted, as it may be a fake advertisement. Also, you must inspect the car yourself if you opt for this buying option.

Things to check before buying a second-hand car

We have already discussed the second-hand car buying process and the purchase methods. So, in this section, let’s look at what to check while buying a used car. 

Go through the points below to learn about 2nd hand car buying checklist.

1. Used-car test drive

You should check the following things while test-driving a used car.

  • Take the car for a drive (at least 5km) to check the overall condition.

  • Ensure that the vehicle starts smoothly without any strange noises.

  • Check if the gears shift smoothly without any jerks.

  • There should be no vibrations on the steering wheel; the steering should be smooth.

  • Check if the brakes work properly. When you press the brake pedal, the car should come to a halt without any strange noise or sideways movement.

  • Check for any noise from the suspension or chassis.

  • Check the wheel alignment by driving the car in a straight line. Take your hands off the steering wheel briefly; the vehicle should move in a straight line. It indicates that the wheel alignment is perfect.

  • Lastly, park the car in a well-lit area and check for oil leaks. Also, check the fluid levels.

2. Pre-purchase car inspection

Once you are satisfied with the car's driveability, the next step is to inspect the vehicle thoroughly. Refer to the points below for the same.

  • Check the car's exterior for any scratches, dents, rusting, paint chip-off, cracks in the windscreen or any other visible damage.

  • Check the condition of the tyres and ensure they have enough tread.

  • Open the bonnet and check the battery condition and the overall exterior of the engine bay.

  • Open and close the doors, boot and bonnet to ensure they work properly. Also, operate the windows to check for any issues.

  • Hop inside the car and check the odometer reading. It should match what the owner has quoted.

  • Inspect the interior for any damages, and ensure that all vehicle features (AC, music system, seat belts, etc.) work flawlessly.

  • Lastly, check the electrical components such as the lights (headlights, tail lights, interior lights, indicator lights, etc.) and wipers.

3. Document verification

Verify the following documents before buying a used car.

  • Registration certificate: The details on the RC should match the vehicle and owner details.

  • Car insurance certificate: Check if the vehicle has an active insurance policy. Also, look out for any accident damage claims.

  • PUC certificate: The vehicle must have a valid PUC certificate as the document is required for ownership transfer.

  • Road tax payment receipt: Check the road tax payment receipt to ensure no pending tax payments against the vehicle.

  • No Objection Certificate: Check the NOC provided by the bank if the car was purchased on loan. It indicates the clearance of the loan.

Factors affecting the second hand-car prices

Here are the factors that impact the 2nd hand car prices.

  • Make/model/variant of the car

  • Date of car manufacturing (age of the vehicle)

  • Odometer reading (Distance driven)

  • The physical and mechanical condition of the car

  • Ownership status (1st, 2nd or 3rd owner)

Things to avoid when buying a used car

Here are the things you should avoid when purchasing a second-hand car.

  • Never buy a used car without test-driving the vehicle.

  • Do not forget to get the used vehicle checked by an expert mechanic.

  • Do not buy a second-hand car based on the exterior looks.

  • Do not go ahead with the vehicle purchase without checking the car’s service history.

Frequently Asked Questions (FAQs)

Here are the most common questions and their answers related to buying a used car in India.

How old should the car be while buying a used vehicle?


Ideally, a used car should be under five years old. Anything above that means you may have to spend on repairs and maintenance.

Can I buy a second-hand car on EMI?


You can buy a used car on EMI by opting for a second-hand car loan.

Which are some of the popular used-car brands in India?


Some of the popular second-hand car brands in India are as follows.

  • Maruti Suzuki

  • Hyundai

  • Mahindra & Mahindra

  • Toyota

  • Volkswagen

For how many kilometres does a car last in India?


An average car can last up to 3 to 3.5 lakh kilometres in India. However, it depends on the driving style and vehicle maintenance.

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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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