In India, an almost immediate question, after the one on the purchase value of a new car, is often the resale value of the car.
No wonder the Used Car Sales Market in India is estimated to be around 1.5 times that of New Car sales - estimated to be around 45 Lakh units, on a yearly basis.
So, let us try to address some queries on the tips of buying a used car.
Mental Conditioning:
Prepare for the following before the used car is planned to buy:
Remember you are buying a Used Car. The car would have suffered depreciation in its value.
The prospective seller of the Used Car may not accept the worth that you have put on the car, he will rather rate its worth usually more; and will bargain.
Be pragmatic. Often, there are more Sellers (and Influencers) than Buyers for the used car. And often both the Seller and Buyer could be depending on the same Influencer, to strike a good deal.
The Used Car market has a lot of grey areas, less straight-jacketed and tailored to suit the buyer. All the transactions may not be straightforward and in Black n White.
There is No Clear Winner in such negotiation. It is often a case of WIN-WIN!
Now the Tips:
1. Once you have decided to buy your car, do a pragmatic and unbiased check on the condition of your car: Engine/Clutch/Brakes/Tyre/AC/Seats/Visual Appeal and the like.
Wherever possible, be ready for investing in re-engineering, to make the car up to date and increase the product's worth appreciably.
2. Review all the Service Records and Warranty terms.
3. The major documents like Original Invoice of the Vehicle, Registration Papers, NOC from Financier, Insurance papers, Pollution Check, Form 28, Form 29 should be in order.
4. Try to gauge the running market price of the Car with similar like features. Getting multiple estimates from various sources including Mechanics, Certified and Non-Certified Sellers, On-Line Sites, and General Discussions will help in deciding on a first cut price.
5. Understand that, usually, dealers work on around 20% gross margin of the Cars asking price. So offer at best 15% below the asking price.
6. It is useful to know that most of the OEMs have a dedicated Used Car Division, which Buys and Sells cars. Often, a loyalty bonus is given to buyers by the OEMs. Certified Online portals too offer similar facilities.
Your pricing of Used Car needs to consider these factors too … the sellers will be considering them, for sure. Possibly, your seller too may have approached these rivals, of yours, for his affection, already.
7. Never betray the affection you have for your car, your lack of sufficient technical knowledge, and your desperation to get the car. All these cues can make you stand to negotiate from a weaker stage.
8. Decide from where you will purchase the product. Will it be thru word of mouth, Communication in known circles thru offline and/or online modes including social media, Press Ads, Online listing at known sites, sale thru certified outlets, sale thru un certified outlets? Do not open all your cards at the first instance.
9. Take Test rides and multiple times, at different conditions before purchase.
10. Ensure that once, your car is purchased all the liabilities too, in full, are transferred to the new owner very transparently and in writing. The liabilities could include the non-negotiated ones including obsolescence of technology, government provisions, and the legal issues if any, that can arise.
Buy your Used Car with confidence … happily and profitably!