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  • Documents To Check When Buying A Used Car In India

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    The automobile sales figure in India is growing at a robust pace. A large part of this growth is credited to the used car market in the country. On the contrary, the process of transferring the ownership of a used car in India is quite complicated. The entire process requires only a limited set of specific documents but the second hand car registration procedure is long-winded. Here, we explain the documents that need to be furnished for used car ownership transfer.

    Why Should You Transfer Car Ownership?

    It is very important to transfer the ownership of a second-hand vehicle you buy due to the following reasons:

    1. Insurance companies mandate that the registration certificate (RC) is in the name of the new owner for the vehicle to be covered by insurance.
    2. After the sale of the car, if there is an accident, the original owner of the vehicle will be detained for questioning as long as the RC is in his/her name. However, if the RC is in the name of the new owner, this is not required.
    3. If the RC is not transferred, it will have the address of the original owner. All subsequent documentation for the vehicle will be sent to that address.
    Documents for Used Car

    Different Types Of Sellers:

    There are three types of sellers from whom you can buy a used car:

    1. Individual seller - If buying from an individual seller, the absence of a middleman in the deal ensures that the buyer gets the used car at a good price. However, the buyer should ensure that the seller is reliable by spending some time in investigating about him/her. Although the process is cumbersome, you can get the best deal by getting a mechanic to help you out in checking the vehicle before sale.
    2. Car company - Almost all car companies have their own used car outlets. Even luxury cars are available in the pre-owned car market. The safest way in which you can get a pre-owned car is by visiting the car company. The car ownership transfer process will require minimum overseeing from your part, and you are also likely to receive a warranty on the car. Free servicing and exchange bonuses are other benefits of opting to buy from the car company. However, the selling price of the car will be higher when compared to an individual seller.
    3. Used car dealer - Buying a vehicle through a dealer ensures that you do not have to go through the difficulty of getting the paperwork done. But you should make sure that the purchase is made from the previous car owner and not the dealer. In other words, if the dealer has got the ownership of the vehicle, then you will technically be the third owner. This can bring down the resale value of the vehicle by a significant amount. Also when buying a car from a dealer, find out if you can receive a warranty as this is a benefit offered by some dealers in the market.

    Documents For Buying A Used Car From A Private Seller:

    When buying a used car from an individual seller, the following documents are involved in the transfer process:

    1. Registration Certificate (RC) - The RC will have important information about the vehicle such as its engine number and chassis number. The buyer has to check the state in which the vehicle was initially registered. If the buyer will be moving it to another state, the registration will have to be done there. The buyer should ensure that the document is not the duplicate copy of the RC (marked by the acronym DRC); in case it is, he/she should check the reason with the seller.
    2. Invoice of Car Purchase - The buyer should be given an invoice for the purchase of the vehicle. Although this will be made available when the used car is bought from a company or dealership, an individual seller may not be able to provide it. In such a scenario, the seller should provide a receipt to the buyer that will serve the purpose.
    3. Insurance Documents - If the buyer intends to get the existing insurance policy transferred to his/her name, the process should be initiated well before the sale. While the insurance is being transferred, the buyer should check whether the premium was paid regularly, the claim history of the seller, and the expiry date of the policy. The buyer should also have a clear idea about the terms and conditions in the policy documentation, particularly the exclusions.
    4. If the buyer is looking to buy a new insurance policy for the used car, then the process should ideally be done before the sale so that there is no break in insurance. It should be noted that the buyer will find difficulty in getting insurance for a used car that is more than 15 years old.

    5. Service Book - This will give details on the servicing history of the car. The buyer will have a better idea of the condition of the vehicle through this. If the car has been serviced as per the schedule then it is more likely to be in better condition that a car that had infrequent services.
    6. Forms 28, 29, 30, 32, and 35 - Forms 29 and 30 are mandatory documents required for buying a used car in India. The second-hand car registration procedure requires the seller to sign two copies of Form 29 and a copy of Form 30 and hand it out to the buyer. The buyer will then submit the same at the RTO for transfer of ownership.
      • Form 29 is the notice of transfer of car ownership
      • Form 30 is the application for the intimation and transfer of car ownership
      • Form 28 is the No Objection Certificate that is mandatory when the car ownership is transferred between states
      • Forms 32 and 35 are needed when the seller has taken a loan to purchase the car

      In case the car was bought through a loan, the buyer will have to get the No Objection Certificate from the financing bank through the seller. This document will clarify that the complete loan has been paid by the seller. If this is not procured, the buyer may be held responsible for repaying the loan after the transfer of ownership.

    7. Receipt for road tax - Road tax is paid only once, i.e., at the time of registration of the car by the first owner. If the road tax is not paid on time, it can accumulate a huge penalty over a period of years. There could even be a situation in which the new owner is liable to pay the same. The road tax varies between states and is usually between 2% and 18%. It is the responsibility of the seller to provide a road tax receipt to the buyer.
    8. Certification for bi-fuel kits - If the car being sold has been configured to run on two types of fuel, the seller should ideally provide the bi-fuel certification to the buyer. A No Objection Certificate is also required from the RTO, indicating the same. The bi-fuel kit usually has a guarantee of 5 years from time it was fitted to the vehicle. So the buyer should ask for the sale receipt of the kit too.
    9. PUC Certificate - It is important to procure the Pollution Under Control (PUC) certificate from the seller, as this certification is mandated by the law.
    10. Owner’s Manual - Do not forget to get the owner’s manual from the seller, as this has important information about the vehicle. The servicing schedule is usually mentioned in the car owner’s manual, and this should be followed if applicable.

    Other documents required for the car ownership transfer process include the seller’s and buyer’s ID and address proof, PAN Card of the buyer, and Clearance Certificate (CC) from the RTO where the vehicle was originally registered.

    The aforementioned points are also relevant when you make a used car purchase from a pre-owned car dealer or the car company itself. The procurement of documents and the entire ownership transfer process is, in fact, much easier when the purchase is made from the car company.

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