Reality check: buying a used car

All of us must have come across long rows of cars with “for sale” placards in our respective cities. Every city I’ve been to has its own used-car district (or districts). I, for once, made the mistake of falling for that Accord 3.0 V6 going for the price of a Ford Figo Titanium. There was just no comparison. It was like choosing between a duplex and a brand new but tight one hall-kitchen. Of course, just as you won’t get a duplex in the heart of the city, you will have to live with a few scratches on the outside and scuffed leather on the inside. “Who cares if it’s used, as long as its luxury and performance,” my heart shouted, sending my mind into numbness.  Well, this is the kind of emotion the used car business in the country has been tuning into.  At first glance, it looks like an industrial shredder that shreds even Tata Motors’ rulebook on value-for-money into tiny bits. But that’s not the only thing it shreds.

With such an inviting picture on the face of it, it is easy to fall prey to this giant shredder if you’re not too careful about your steps – as I was about to discover. I’m quite assured I’m not the only one strolling around the used car market. When there’s everything available right from Maruti 800s to a low mileage BMW M5s and Bentley Continental GTs, I know there are many buyers as well. And relatively high number of casualties too! I had already taken the plunge and I thought I should try and decipher the parallel industry, which looks all glitter but is as unorganized as a gang from a UP village. Most of the things you are going to read are a firsthand account.

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Next: Making up your mind / Research       

           Checking out the car / Test drive 

           Finances

Make up your mind

The most important thing to do first is to decide. With an ocean of choice around, this can be the most difficult part. I can tell you that my tongue rolled out like a Hollywood red carpet when I saw the what a steal the Accord V6 was, but as soon as my mind got to do some math, it rolled back in and my heartbeat started soaring at the thought of 4kmpl the car would return. It was like a slow suicide strategy. Cheap horsepower ain’t necessarily cheap to run, was my first lesson. When zeroing in on a car, it is always important to jot down all your requirements and prioritise them, as you’ll need heaven’s choicest blessings to come across the perfect package here. In my case, I needed a three box sedan, preferable a C+ or D-segment car, reasonably specced (at least with leather upholstery) and a powerful motor. Brand and image were important too. What also governed the purchase was the price. Yes, I wanted it as inexpensive as it got. At the end of the screening, my choice was reduced to Honda Civic and Skoda Octavia vRS.

The research

You’ll figure, it is much more comforting to step in to the market when you know what you want. It saves you from wasting time on unnecessary distractions and concentrate only on the available cars from your list. Once the car and budget is fixed, you need to get down to some ground work. Finding cars can take time and is an exhaustive process. The easiest way is to make use of online resources. Search tools on various websites enable you to shortlist cars depending on their make, model year, mileage, engine, trim level, locations and what not. Trust me, it is a lot easier doing this from from the comfort of your home or office than visiting used car dealerships. Once you’re done with this, you will need to start calling people and fixing appointments to check out the car.

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                   Finances

Checking out the car

This is the point where most people are taken for a ride, and not just literally. Checking out the car demands a certain amount of skill, so if you are not too sure about things take someone who knows the innards of a car along. Fix a time in broad daylight as it is easier to inspect the car. Shiny bodywork might mean a well-kept car but can also translate to replacement panels after a serious accident. 
Pop that hood and go under the skin. The mounting panels behind the bumpers, where headlamps and grille are mounted are a good place to start as they are bound to get damaged in the event of a serious front collision. Also check the radiator mountings. Most people (and service centres) prefer straightening the mounts rather than replacing them and signs of damage can be easily seen. Check for corrosion and rusty bolts. They might cause serious trouble in the future. If you can, check the underbody for serious damage and skid marks. Needless to say, check the bodywork all around, especially the door sills and also check to see if the doors shut without any obstructions.  Check the tyres since replacing a set can be expensive. Open the boot and check the spare wheel. It sometimes shows signs of abuse. Also stand behind the car and check if the front and rear tracks are aligned in the same line. If they are offset, this is a sign of serious chassis damage.

Always insist on the owner’s manual and service history of the car. Check the registration papers and the number of owners. Also check the validity of insurance and if any claims have been made. Renewal of insurance can cost you a decent sum.

Once you’re inside, check if all electricals are working, right from the light switches, audio system and cabin lights to all power window switches and power mirror controls. Also check if the central locking works perfectly. Check seat adjustments, especially if they are electric. These niggling issues can be expensive fixes.

The test drive

Then comes the test drive part. This should be fairly simple if you can gauge if everything is working just fine. Don’t expect it to work like clockwork. Consider yourself lucky if it does, but you can expect a few signs of distress from a used car. It is important to see if the clutch is progressive (and not jerky), gears slot positively and engine revs freely right till the redline. Keep your eyes open for sudden hiccups while accelerating and slowing down and jerky power delivery. Smooth performance is an assurance of some decent amount of life left in the engine. Check brakes, they should be progressive and bite should be decent. Ask the owner if (and when) he got the brake pads replaced. It is always advisable to get the car checked thoroughly by a trained mechanic, given you have that kind of time in your hands and the owner of the car is willing.

Things might get a harder if you have to contend with a dealer rather than the actual owner and all you are left with is self-assessment of the car. The dealer usually portrays that his is the best used car ever and you wouldn’t get a car like in the whole universe. One blind step here and you’ll find yourself caught in the shredder blades. My advice - trust no one, except your own eyes.

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                   Making up your mind / Research

        Next: Finances

The finances

While you are doing all of this, do not neglect the most important part – the finances. If you’re smart enough, you’ll already have either the cash ready or a ready strategy to get the funds organised quickly. I wasn’t, and ended up losing a near mint condition Octavia vRS as someone with ready cash drove it home even before I could arrange for the ‘token amount’. I learnt the hard way that time, tide and deals wait for none. It is always good to immediately put down a token advance, if you think the car is worth buying.

Coming back to the finances, all major banks offer finance on used cars but the rate of interest is pretty high, soaring up to 20 per cent in some cases. This means the car will effectively cost you double its value if you take up a five year loan. Check with your bank for deals based on your employment status and relationship with the bank. Sometimes it is also advisable to go in for a personal loan as the rate of interest works out to be cheaper. Also, some banks don’t offer used car loans for cars that have had more than two owners. A personal loan might be helpful here if you have zeroed on such a car. There is a lot of paperwork involved so keep important documents like copies of your identity proof (passport, driving license, voter’s ID), address proof, PAN card, bank statements and photographs handy.

Another way to handle this is through a DSA (direct selling agent) for bank loans. Your car dealer might be one in all probability and will cut down your running around time by a fair margin. Double and triple check the rate of interest, EMI amount and tenure of the loan before signing on the dotted line. Then there are a few other ‘hidden’ costs involved. The dealers usually put in arbitrary costs over things like transfer of ownership, insurance, processing fee (for both the bank and the dealer) and ‘handling’ charges. While they will emphasize all charges are mandatory, you can always bargain on some.I don’t know how you will take to it, but buying a used car is big exercise, much more exhausting than buying a first hand car and those hours spent in the sun might also lead you to lose a few extra pounds. Nevertheless, if you think it’s worth the effort, go for it, I say. Remember the cheap duplex might mean a lot of extras than the tight one BHK. This not only includes more features at your disposal but also fat maintenance and fuel bills compared to a new small car. A new car comes with an almost free maintenance plan for a couple of years at least, mind you. The other way to look at it, is you will have the car in your parking that you cannot afford new right now. Go on, take the plunge but don’t fall in to the shredder. As for me, my loan application’s still stuck at the bank. I guess the longer it stays, there the better. I don’t mind waiting for the price of the BMW 3-series coming down a bit more, eh?

Also check:

Previous: Introduction

                    Making up your mind / Research

                   Checking out the car / Test drive