Tips and Advice

Buying, Selling & Exchanging used cars can be tricky. Carnation brings you some easy tips; follow these simple guidelines to get what you are looking for.

What are the factors that impact the resale price of my car?

An automobile is a depreciating asset where the price depreciates with time (Age). Apart from age of the vehicle there are many other factors that impact the resale price which are both external & internal.

External Factors: The external factors are not in your control and mostly impact resale prices of all cars, in some cases impact certain specific vehicles. Some of these factors are shown below:

• Demand and supply
• Change in government regulations, excise, taxes, etc
• Technology obsolescence like, Emission compliance norms, Introduction of new models of the with advanced technology
• Drop / change in new vehicle prices & features
• Discontinuation of the models
• Comparative cost of repairs & maintenance
• Easy availability of service facility and spare parts
• Availability and cost of used vehicle finance

Internal Factors: These are the factors that are in your control

• Condition of the car including the attractiveness of color
• No of kilometers the odometer has clocked
• No of ownerships
• No accident or flood damage
• Accessories / retro fitments fitted in the car
• All documents like RC, Insurance, service history, owner’s manual, etc in order

What documentation is involved while selling a car?

While selling the car it’s essential to ensure the following documentation is in order:

• Transaction related documents: Sale Letter / Sale Agreement, Payment Receipt, Delivery Letter
• Finance & Insurance related documents: NOC / Form 35 from financier, Insurance Transfer document
• RTO related documents: Various documents are involved like Form-28, Form-29, form-30, etc based on the nature of the transaction (You can get these forms from the site : http://www.indiandrivingschools.com/rto-forms.html )
• Buyer Documents: If you are selling to an Individual then having ID Proof , Address Proof documents is very important

Why is the vehicle condition important while selling a car?

A well maintained car fetches better price:  The used car buyers of are looking for good quality cars that are well maintained by the owners. 

• Get your car regularly serviced and keep the service records with you. 
• Avoid rash driving & handling. It can be fun but depreciates the car faster.
• Maintain the health of the tyres by regular pressure check. 
• Keep the car clean from dirt, stain marks, odor, etc while showing it to the buyer.
• Know your car’s health. You can bargain a better price if you know the health of all the major systems in your car, like: engine, transmission, brakes, etc.

What are the mistakes one should avoid while selling a car?

• First and foremost is not to sell a car to someone you don’t know, this could be risky and could lead to problems. If a stranger approaches you for buying your car it is important that you establish his / her identity by verifying ID Proof, Address Proof, etc and ensure you keep a copy of the same with you. Most of the organized dealers verify these buyer documents before selling a car.
• Don’t neglect documentation. Ensure you keep a copy of all documents involved during the process and the RC & Insurance are duly transferred.
• Don’t go by verbal communication. Selling a car is a financial transaction involving money and statutory requirements. Please ensure all the transaction is documented properly and all the documentation related to Finance, Insurance, Registration, etc are duly filled up and signed both by you and the buyer.

What happens if RC & Insurance are not transferred in the name of the buyer?

If the RC is not transferred and the buyer of the does any violation of traffic rules, law, etc the seller is at a disadvantage.

How to know the prevailing market price for my car?

Internationally there are 3 types of prices that prevail in the market which are updated on regular basis as shown below:

1) Dealer Price: This is the value a car dealer offers to the sellers based on the current demand for the model. This price is normally less than the private transaction value (i.e. when you sell directly to an end user) as the dealer is making the full payment up front to you and then has to cover his cost of showroom,  capital, manpower, electricity, fuel, etc.

The advantages are that you get the full payment quickly and don’t have to waste your time searching around for a potential buyer or haggle with many strangers. Since the dealers are in this business they know all the documentation involved and can take care of the same which an individual buyer may not. Also, you can sure that you are selling your car to someone established in the market and not to a stranger.

2) Trade-in Price: This is the price offered by the dealers when exchange your car with a new car, where there is exchange bonus is involved based on which new car you are buying. The exchange bonus is an offer on the new car which is added on to the buying price of your car. This price will be similar or little higher than the dealer price.

3) Private Party Price: This is the value an individual buyer offers and is highest amongst all the prices as there is no intermediary involved.  When you are dealing with such individuals you need to ensure that all the documentation is taken care of by the buyer.  

Buying a preowned car, is it a wise decision?

There are many advantages of buying a preowned car:

• Depreciation:  The maximum depreciation on a car happens when it’s new (i.e. in the first 1-2 years) and then the depreciation is relatively lesser. By purchasing a preowned car you minimized the loss due to depreciation and hence the total cost of ownership.
• Bigger Car at a lesser price: If you have a budget of Rs.2.5 to 3.0 Lacs you have limited choice in the new cars where you can buy a basic model of an entry level A1, A2 segment car. However, the choice increases tremendously when it comes to preowned. You can explore a 2-3 year old A2 (Small Hatch) Segment Car, or a little older A2+ (bigger hatch) segment car or a 4-6 years old Entry A3 (3 Box) segment car. You can select the specific make & model based on your individual needs like family size, fuel economy, etc.
• Change Faster: Now, with many new cars being launched there is increasing aspiration to go for bigger & better cars. Buying a preowned car you have higher flexibility of changing by taking a lesser hit on depreciation.
• Multiple Savings: You can save on initial cash out flow, lower premium on insurance (on depreciated amount), saving on road tax (Life tax is paid when the car is bought new); saving on depreciation, etc.

All in all it’s a wise economic decision to buy a preowned car of the right condition, suiting your budget & needs.

How to check the authenticity of registration documents of the vehicle?

All vehicles that are plying on the Indian roads are to be registered at the regional transport / registration authorities and a specific registration number is given to each vehicle.  These offices have all the information related to the particular vehicle in terms of Make, Model, Engine & Chassis Number of the Vehicle, Present Owner Name & Address, Vehicle Hypothecation details, etc. You can get the information from the respective offices where the vehicle is registered which is generally called RTO information or Form-B. You can also check of the vehicle is stolen from Nation Crime records Bureau (website: http://ncrb.nic.in/home.htm) and online information from:  http://164.100.44.106/motorvehiclequery/(c11ed055ych1oouzpq1f2t3o)/MotorVehicleQuery.aspx.

What is the difference between buying a car from individuals, local dealers or organized players?

When you buy from Individuals or local dealers you get to buy the car As Is Where Is condition without any condition check or refurbishment of the car. You are at your own discretion