Don't end up buying a stolen car in India

Documents required in India when buying a car

Do your know if the used car you are buying has a loan on it? What documents MUST you get from the used car seller?

Buying a car may be the easiest purchase one can make in the western world. In North America, in most cases you can just walk into the dealership and the chances are you may be able to even drive out with your purchase.

However buying a car in India is slightly different.

While purchasing a new car is straight forward and as in such a purchase car dealerships are involved. I will not discuss new car buying in detail as the dealer ultimately is responsible for getting you most of the documentation.

Car buying problems usually happen when buying used cars. In a majority of cases people are not aware of the documentation required and sometimes get cheated when buying used cars.

When buying a used car, buyers need to ensure that:

1. The car does not have any loans attached to it. If you end up buying a car on which the seller owes money. Then you ultimately may end up paying this money to the finance companies.
   
2. Condition of the car to ensure it is in good running condition.
   
3.  All documentation is obtained from the seller and VERIFIED.

Documentation buyers should insist on when buying a car

It is of utmost importance that before paying for the car to ensure that all the documentation for the car you are buying is in order.

• Registration certificate (RC Book): This is a document issued by the Regional Transport Officer, commonly known as RTO.
  
• The RC Book will include information showing:
  
  1.1. A complete record of owners of the vehicle.
  
  
  1.2. Date of registration of vehicle.
  
  1.3. The car’s engine number.
  
  1.4. The car’s chassis number. (Like a VIN number of
  American Cars)
  
  1.5. The name of the state in India where the car is
  registered.
  
  NOTE: Always compare the chassis number in the RC Book and the car to ensure they are the same. The engine number should also be examined. The seller may have changed the engine from the original engine.
  
•  Tax Certificate Book (TC Book): This document will show whether road tax has been paid for the car or not.
  
  Please Note: Unlike in the west where road tax for vehicles is paid annually. In India the road tax is paid once for the life of the car. Incase you end up buying a car for which the lifetime tax has not been paid. Then you may be responsible for this payment.
  
  
  
•  Pollution under Control (PUC) certificate: In India every car now needs a PUC certificate. PUC certificates are valid for one year and a new certificate is required every year for new cars and every six months for used cars depending on the age of the car.
  
  
  
•  Original purchase invoice: Ask to seller to provide you with the original invoice when the car was purchased from the dealer. This invoice will also show the engine and chassis numbers along with date of purchase, name of original owner and more importantly if the car was purchased with financing.
  
  
  
•  Insurance documentation: While you will be getting your own insurance it is prudent to check the insurance policy documents the seller has for the vehicle. In some cases the insurance can be transferred in your name.
  
  
  
•  In case the car you are buying was financed then you need to get a document called ‘No Objection Certificate’ (commonly known as NOC) from the finance company. This document is to ensure that the finance company does not have any further claims on the car.

Checklist of documents for transfer of ownership of cars in India

Here is a checklist of the documents that are required to transfer ownership of a car in India.

Documents the RTO will need are:

1. Form ‘TCA’ (Intimation of the transfer of ownership of vehicle  by a buyer)

2. Form ‘TCR’ (Intimation of the transfer of ownership of vehicle by a seller

3. Form Num 29 (Notice of transfer of ownership of vehicle)

4. Form Num 30 (Report of transfer of ownership of vehicle

5. Valid insurance policy for vehicle

6. PUC Certificate that is valid.

7. Address proof of the Transferee i.e. the buyer.

8. Proof of payment of all taxes up to date.
   
   Incase the vehicle being bought is from a different state in India than the state where the new ownership is being registered.
   
   Then Form Num 28 – Application NOC and grant of certificate is also required. There can be other costs involved also when buying a car from a different state, such as interstate taxes called octri.

Buying or Selling Out of State Cars In India

Many cars are offered for sale in India that have been registered in different states that the ones they are sold in.

Such cars are usually priced below the market rate. If you are ever in a position where you are thinking of buying a car that has been registered in a different Indian State, then do your home work. 

Transferring the registration of a vehicle from one Indian state to another state is an awkward procedure and requires time and money. Keep this in mind if you plan to buy a car that is registered in a different state.  

Usually it is not economically feasible to buy an out of state vehicle in India as you would end up paying octri tax which is quite a large amount. Don't let the initial low price fool you.

Out of state vehicles also have a greater change of having questionable ownerships.

Such sales also involve a required of getting a no objection certificate from the state where the vehicle was originally registered in. Many such vehicles may have such certificates but they could easily turn out to be forgeries.

When buying a car find out who you are buying the car from. Don't buy from unknown people. Forged documents can result in not only the loss of your money but lead to other problems with the law.

People who willfully buy low priced products without verification usually end up facing the law. Ignorance of the law is usually no excuse.

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