Here is a Checklist to Follow When Buying a Car from Your Friend!
If you are looking to buy a used car, you have several options. You may buy one from a certified dealer or from a friend or relative. Buying a second-hand car from a friend is convenient and a trusted option. You may already know much about the vehicle. However, you must still consider some factors before you go ahead with the deal.
Here is a six-point checklist to follow prior to purchasing a used car from your friend.
- Check the car
Although you know that your friend has taken good care of the car, there may be some unexpected damages or flaws that exist. It is recommended you have the vehicle checked by an experienced mechanic to determine its condition. The mechanic has an in-depth knowledge and the necessary equipment to undertake a thorough check of the car. He will be able to tell you if any repairs are required and the approximate expenses for the same.
- Inspect the ownership
Checkif the ownership documents are in the name of your friend. Your friend may have availed of a loan on the vehicle and the title documents would show you that the car is owned by the lender through a lien. It is important that the title is clear as it is mandatory if you also need to opt for a second-hand car loan. Furthermore, you need to see if ‘salvage’ is mentioned in the title documents. This means that the car has suffered damages that are more than its value.
- Complete the purchase
Even when you buy the car from a friend, it is important to agree to a mutual price. One way to determine the fair value is to ask your mechanic after he inspects the car. You may also check online for the approximate price of vehicles that are similar to the car you want to buy. Financial institutions offer used car loans and if you avail of such a loan, getting an independent valuation done from your lender will also give you an approximate valuation.
- Sale document
Getting into a sale document at the time of completing the purchase is recommended. This document comprises all the terms and conditions related to your purchase. It will include the purchase price, payment mode, and date of completing the deal. You and your friend must sign this document to ensure it serves as a proof in case of any dispute in the future.
- Title transfer
The title certificate is the primary proof of ownership. It is crucial that you get the title transferred to your name before completing the deal. Transfer of ownership is also necessary in order to avail of used car finance.
- Purchase insurance
Car insurance is mandatory as per the legal regulations. You must ensure you purchase the insurance before you start driving the car. Having vehicle insurance before registration is advisable to ensure you have no trouble at the time of completing the procedure. Furthermore, lenders also require you to purchase vehicle insurance before approving the application of your loan for a second-hand car.
When you buy a car from your friend you may rest assured as you would not be cheated. While purchasing the used car, it is possible that you do not have the entire amount required to complete the deal. This limitation is easily overcome with second-hand car finance.
Most banks and non-banking financial companies (NBFCs) offer such loans in India. The documents needed for these loans are minimal and the entire procedure may be completed within a few days. Contrary to belief, the used car loan interest rate is competitive and ensures you have no difficulty in making timely repayments.
If you are at least 21 years old with one-year employment and residential stability, you may apply for such loans. Lenders fund up to 120% of the value for cars that are not older than 10 years. You may choose up to seven years as the duration of yourloan for a used car.
For added convenience, apply for a loan online and drive away in your dream car today!