The Hindu Business Line : Drive off with a good deal

When my dad finally made up his mind to sell his old car last week, I was elated to do some homework on recommending what model to buy in place of the old car. As I was screening the price catalogues of various models, my friend suggested that I peek into the pre-owned cars’ list too. Initially the idea didn’t impress me. But when I gave it a closer look, I stood mesmerised.

If I can buy a two-year old Honda City and Toyota Corolla for Rs 6 lakh and Rs 8 lakh, respectively, why go for anything else? Besides, with the cash I would save on buying a pre-owned car, I could refurbish the interiors; go in for a Blaupunkt music system and a lot more! So, quickly, I made up my mind in favour of a new pre-owned car.

An executive from Maruti’s True Value said their customers are invariably first-time car buyers aged between 30 and 35, and a hatchback would more than fit their requirements.

The premium segment of used cars is a little different though. According to Mr R. Kannan, General Manager, Sales & Operations, Trans Cars India who deals in Mercedes Benz, “Most customers who opt for pre-owned sedans are those who’ve used cars for a long time and are now looking to upgrade to a premium sedan. Their average age would be 40-45 years. As they tend to be cautious, they prefer pre-owned cars to a new car.”

Second-hand dealings, traditionally known to be an unorganised business, are often through workshop mechanics or the family and friends circle. But over the last three years, this market has seen tectonic changes.

With the entry of major carmakers such as Maruti Suzuki, Hyundai, Honda Motors and even BMW and Mercedes Benz, the business has become more structured and organised. As per to industry estimates, 1.5 million new cars and 1 million used cars were sold in the last fiscal year.

According to Mr Kannan, it is the lower cost of ownership that makes the pre-owned car segment look very attractive. But remember that the used car market throws other tricky issues. Without an eye for accuracy, the buying experience may turn sour. The real buying process is about investing time in inspecting the car and verifying its documents.

Care for the car

To begin with, know the year of purchase and correlate it with the odometer reading. On average, a three-five-year-old car may be used for 20,000-50,000 km.

If you feel the car has been underutilised, question the owner. But remember, tampering with the odometer reading is no rocket science. Take a look at the undercarriage. The bodyline will tell you whether the car has suffered any major accident.

Open the bonnet and check the paint work. See if there has been any repainting. Also check the A-pillar for cracks. The acid wear and tear around the battery area will indicate how well the car has been maintained by its owner. Pay attention to the tyres, battery, electrical components, air-conditioning and music system. If they are not in perfect shape and need replacement, you are left with ample scope for price negotiation. A test drive is essential. Take the car out for at least 4-5 km and subject it to different road conditions. If you return with a smile, carry out the next set of tests.

Documents under microscope

A thorough job in verifying the documents will ensure hassle-free ownership. Start with the registration certificate (or RC Book). See if the Engine and Chassis numbers match the numbers in the RC book and original invoice.

Insurance certificate is another important document. This will tell you if there have been any prior accident claims. The accompanying table has a list of other documents to be verified.

Where to buy?

You may continue to place reliance on your mechanic and neighbourhood to buy a used car. But if you want the process to be a smooth drive, shift gears and turn to authorised used car dealers such as Maruti True Value, Chevrolet OK, Honda Auto Terrace, Hyundai Advantage, Mahindra First Choice and Toyota U Trust. Organised used car dealers generally have a team of engineers who work on the car part-by-part to and certify that it is in a neat condition.

Not just that, they also offer warranties and discounts, apart from the benefit of insurance, financing options, free repairs for certain period, and some original car components.

“Theft and accidents are the two main things to watch out for in a used car. Buying from an authorised dealer will ensure that these aspects aren’t overlooked,” says the executive from Maruti’s True Value. Then again, don’t side-step the paper work. Do it yourself to ensure that you buy the most reliable second-hand car at an attractive bargain.

As there is always an ounce of doubt about the quality of ownership and residual value, banks charge a 6-7 per cent premium over the usual auto loan rates when they lend for a used car.

So if you are looking at buying a pre-owned hatchback through a loan, the deal may not benefit you monetarily.Use this list of caution to grab your dream run. Enjoy the drive!