“Do work in silence and let your newly bought car make some noise.”
The automobile industry in India has been witnessing robust growth in recent years, a sizable credit to the used car market. Several hardships faced by the manufacturers such as chip shortage, pandemic lockdowns, and choking economic circumstances has resulted in potential consumers browsing through quicker and much more affordable alternatives. The process of transferring ownership of automobiles isn’t as cakewalk as it seems.
A four-wheeler vehicle, preferably a car is the ultimate dream for every middle-class family in India. Whether it is rushing to drop off their kids at school once missed the school bus, trips to the mall or simply saving the hassle of commuting from the workplace to home and vice versa, a car would definitely be a boon to the middle-class society.
If there is a lack of funding for a brand-new car or even a used vehicle, you can avail a second-hand car loan. Some of you might wonder why people would prefer a used car loan over a basic car loan, that is due to the fact that used car loan interest rates are much lower than the regular car loan interest rates.
The roadmap to apply for the loan at an excellent used car loan interest rate is as follows:
The first and foremost step is to check whether you’re even eligible for the loan plan you are applying for. After all, nobody likes a rejection letter in their mail. The eligibility criteria for a second hand car loan is as follows:
- Residency: The applicant must be an Indian Resident.
- Age: Must be at least 21 years old and no older than 60-65 years old at the time of application.
- Employment: Both Self-employed professionals and non-professionals along with salaried employees of the Government, private and public sectors are eligible to appeal for the loan plan.
- Salary stability: The credit score criteria differ from one loan provider to another, usually, a credit score of 750 or above shoots up your chances of avail for the loan at a lower interest rate. You should be earning at least Rupees 15,000/- or more per annum. A self-employed applicant should profit at least Rupees 1 Lakh per annum through their business.
You can either choose to physically visit your loan provider for the completion of the loan application or directly upload it online from the comfort of your home. Further proceedings will be executed only after the verification of your documents in accordance with the second hand car loan plan chosen by you.
- Self-attested application form with photograph attached.
- Identity Proof- PAN Card/ Voter ID/ Driving Licence/Aadhaar Card/ Passport. (Coupled with a copy of whichever you will be producing)
- Residence Proof- Aadhar Card/Ration Card /Voter ID/Driving Licence/ Passport/Electricity Bills.
- Age Proof- Aadhar Card/Birth Certificate/SSC Certificate/Voter ID/PAN Card.
- Bank account statement for the past 6 months.
- For salaried applicants: Salary slips for the last 3 months and Form 16 or Income Tax Returns for the last 3 years.
- For self-employed applicants: Income Tax Returns with computation of Income for the last 3 years and CA-certified balance sheet with the profit-loss account.
After the approval of the loan, the second hand car registration necessitates a specific set of essential documents. This wouldn’t only benefit you with attaining your legal documentation and paperwork but also ensure an absolute and appropriate status check of the vehicle in question. The following documents are supposed to be availed once the loan amount has been credited to your account:
A vehicle registration certificate is used to verify whether or not the particular vehicle is registered with the Government of India. It states the territorial boundary in which the vehicle can be used, date of registration, registration number, owner’s serial number, owner’s name, engine and chassis number, type of fuel used, and cubic capacity, and specifies the category of the vehicle. Be vigilant and ensure that an authentic RC has been procured. The changes have to be updated correctly on the RC.
An owner’s manual is of utmost importance as one must always acquaint oneself with the important instructions concerning the vehicle. It includes the servicing schedule, the location of parts like the fuse box, and crucial maintenance tips.
Invoice of car Purchase:
With an increase in the numbers of statistics displaying car thefts, demand for the invoice of the car purchase by the previous owner is important coupled with a mandatory invoice of your own purchase which carries signatures of both parties. This will serve as proof that the vehicle truly belongs to the owner in question, authenticated by the showroom.
Service Logbook or the Blue Book is a record of the type and number of services the car has availed in the past. This will allow you to inspect the maintenance of the vehicle which would include damage repairs, replaced parts and the basic condition of the car. The meter readings at each service would also indicate if the odometer readings were tampered with.
Forms 29 and 30 are pre-requisite documents required for buying a second-hand car in India. The second-hand car registration procedure requires the seller to sign two copies of Form 29 and a copy of Form 30 and hand it out to the buyer. The buyer will then submit the same to the RTO for transfer of ownership. Form 29 is the notice of transfer of car ownership, while Form 30 is the application for the intimation and transfer of car ownership.
No Objection Certificate:
Most of the vehicle owners have bought their respective cars with the assistance of loans issued by the bank. Thus, a no objection certificate must be issued by the bank which states that the vehicle is free from all loans and the financier has no claim over the vehicle under any circumstance. If a used vehicle which has not completed its loan tenure is bought, then post-transfer of ownership the present owner would be liable to pay for it.
Road Tax Receipt:
Road Tax Receipt refers to the onetime tax which is paid to the government during the purchase of the vehicle, it is obligatory to ensure that there are no accumulated penalties concerning delayed or no tax payment which would by default fall upon the new owner. The road tax is variegated, ranging from 2 to 8 percent in respect to the geographical area.
BI Fuel Certificate:
If the vehicle has been configured to operate on two types of fuel which is petrol and CNG, the registration certificate must mention the same coupled with an NOC provided by the RTO and a receipt of the retrofitted kit must be procured by the seller for the buyer. The bi-fuel package normally has a guarantee of five years from the time it was converted.
Emission / PUC Certificate:
A PUC Certificate indicates the car’s emission levels and the condition of the engine. It is a mandatory document which must be kept in the vehicle at all times as it is often checked for and is mandated by law.
Once you have effectuated the above process and acquired the second hand car loan at the best-used car loan rate, the only thing left to do is enjoy your ride every day and pay up your EMIs without any unnecessary delays. The above-mentioned criteria check and list of documentation would ensure that you are fit for taking up the loan and are going for the correct vehicle. Fasten your seatbelt and do not go over the speed limit!