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The Ultimate Checklist for Buying a Used Car

For most people, buying a used car is daunting. The reasons are obvious. You don’t have an idea of what the car has gone through and how has it been maintained. You definitely do not want to be stuck with a white elephant which needs costly repairs every now and then.

Good news is that buying the car is not so daunting as it seems, especially with this handy checklist. So, here it is:

    1. Work Out Your Finances

Before deciding to buy the car, figure out what fits in your spending budget. Evaluate your financial situation and determine the best way to get finance.

    1. Research to Compare Car Prices

The best place to compare used car prices is online. You’ll get a fair idea of the selling price of the particular car model and the make. You can then consider browsing through the cars available at the used car dealerships or private sellers.

    1. Take a Test Drive

The best way to check the condition of the car is to take it for a test drive. Here are some things you need to check:


    • Is it easy to get in and out of the car?
    • Are the seats comfortable?
    • Is the driving position comfortable?
    • Does the car start easily?
    • Does the steering exert a pull to one side?
    • Are there any weird sounds coming from the engine or brakes?
    • Is there enough legroom and headroom?
    • Is the engine light on the dashboard on?
    • Are the tires good?
    • Is there any suspicious smoke coming out from the exhaust?
    • Are the brakes, headlights, indicators working fine?
    • Does the air-conditioning cool good enough?
    • Do brake lights, tail lights work?
    1. Get the Car Inspected

Inspect the car in daylight. Check the paintwork, lights and accessories. Get all the systems, such as the engine, wheels, transmission, cooling, etc. checked by your trusted mechanic.

    1. Documentation

No matter from whom you plan to buy the vehicle, you need to thoroughly check these documents.


a) Registration Certificate (RC) 

The Engine number, Chassis number and Vehicle Identification Number (VIN) on the RC have to match with the VIN plate of the car, which is located either under the bonnet, on the driver side’s dashboard or door, at the front fender or front of the engine.

b) Insurance

Things to check for while going through the insurance papers:

      • The type of insurance. Third-party or comprehensive?
      • The expiry
      • Whether premiums have been paid regularly

Once the checks are made, then initiate transfer of the insurance to your name.

c) Service-related Documents

Through past service record documents, you’ll get to know the car history. You’ll get to know the actual running of the car, the service intervals and also whether it has been serviced at a proper service station.

d) Form 32 & 35

These forms are applicable to you if the previous owner had taken a loan to finance the car purchase. Get a copy of the NOC issued by the financial institution stating that the loan has been paid off.

e) Road Tax Receipt

It is a one-time payment that the car buyer has to pay. If the previous owner hasn’t paid it, you’ll have to pay it. So, make sure you get the receipt of payment.

f) Purchase Invoice/Sales receipt

Ensure that you ask for a sales receipt/printed sales invoice for your car purchase.

    1. Negotiate the Price

Negotiating a deal should not fill you with dread. Some tips on making a good deal pretty easily:

    • Decide how much you are willing to spend on the car (maximum price).
    • Open the offer with a price lower than your maximum price. Let them know you have done your research and that you have facts to justify your offer.
    • If you and the seller agree at a price you are willing to spend, you have got yourself a good deal.
    1. Pay for the car

Ways you can finance your second-hand car purchase:

    • Personal loan – Unsecured loan, low interest rate, 100% finance, no down payment
    • Vehicle loan – Secured loan, high interest rate, 100% not financed, down payment required
    • Credit card – Unsecured revolving credit line, extremely high interest rate
    • Full payment – Yes, it’s an option if you can afford to pay in full.

If you have gone through the used car checklist and decided on the best used car for you, the next best thing to do is apply for MoneyTap’s used car loan. It’s the best way to finance your second-hand car purchase. Download the app now!

Shiv Nanda

Shiv Nanda

Shiv Nanda is a financial analyst at MoneyTap who loves to write on various financial topics online. He also advises people on financial planning, investment choices and budgeting skills, and helps them make their financial lives better.

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