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Legal things to mind while buying or selling a used car

Legal things to mind while buying or selling a used car

Snapshot: It is important to get the car legally transferred and registered to the buyer’s name at the time of sale! Here is a list of important documents to have ownership of.

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When you buy a second hand car, your rights are the same as when you purchase a brand new one. However, there are some differences between the two transactions. Some problems may also arise when the buyer finds some hidden fault with the used car. If the vehicle is faulty and you want to make a complaint regarding this will depend on the age and the make of the vehicle, the description made by the seller and the price that you pay for it.

It is important to get the car legally transferred and registered to the buyer’s name at the time of sale. While transferring the car ownership, the buyers should revive the following certificates from the seller:

  • Form No 28: This one is the proof of application for No Objection Certificate. It is mandatory when the buyer is residing in some other state.

  • Form No. 29: This one concerns the notice of transfer of the ownership of car.

  • Original copies of the insurance policy, the car registration certificate as well as the photocopy of the delivery note.

In addition to this, if any valid warranty papers are available or there are any service history records that can help in better maintenance of the vehicle by the new owner should also be given by the seller. The photocopies of Form 28 and Form 29 must be kept safely as evidence. The copies of registration papers and the insurance policy, too , should be retained. The seller should sign the car transfer papers and deliver the car only after completing the necessary documentation and receiving the full payment. If the payment is being made through cheque, it is advisable to transfer the papers only after the cheque has been cleared.

If you notice any problem in the car, be sure to act as quickly as possible after purchasing it. This is because your claim will depend on the condition of vehicle when it was sold. Your rights depend on whether you bought the car from:
A dealer: You get maximum protection from law when you buy a used car from an authorised dealer. Check whether the dealer has the right to sell the car and he should be ready to sort out any problem if the car fails to meet the basic requirements. The dealer is liable for faults in the car that were present at the time of sale. He will not be liable if here is any wear and tear out of the normal use of the car. The law prohibits the dealers from -

  • Giving False information

  • Giving Insufficient information

  • Acting aggresively

From a private seller: Buying from a private seller is definitely cheaper but is riskier. Avoid making a cash payment, as there are chances of no come-back of your money, in case something goes wrong. A banker's draft is an ideal thing, which can help you bypass this risk. A genuine seller will be more than happy to go for this option. 

Over the internet: When buying a pre-owned vehicle over the internet, you rights are the same as the rights you would enjoy when buying the used car in person from a dealer. In all the cases, you should check the following documents when entering into a deal:

  • Registration certificate

  • Insurance

  • From 32 and 35

  • Service Book

  • Road Tax receipt

  • Car purchase invoice

Are you well aware of the used cars documents transfer process in India?

Are you looking to buy/sell one? Have a look at the latest pre-owned cars here.

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