You may have a lot of confusions, questions and doubts regarding selling and buying a used car. It is not that easier to sell a used car, but it becomes so easier when proper steps and procedures are followed one by one. Here are the tips to legitimately sell and buy used cars.
Documents should be kept before buying and selling
Form 29 (2) - Notice of transfer of Ownership of a Motor Vehicle
Form 30 (1) - Application for Intimation of transfer of Ownership of a Motor Vehicle
Form 35 (2) [only needed if the vehicle is under loan] - Notice of Termination of an Agreement of Hire-purchase /Lease/Hypothecation
Transfer Deed (2)
NOC [only for inter-state]
One touch before selling a car
Before selling a car, service it properly for a final time at any authorised service station. Check out car's interior, exterior, tyres, scratches and everything. Then resolve it according to the necessity. A good looking car in good condition will only increase the value of the car. Thus the seller gets the best price.
If the vehicle has debt or loan
If the car was purchased on a loan, repay your lender (bank) and keep the receipt as a proof for your payment. After collecting Form 35 (2) and NOC from the lender, get in touch with the nearest Joint RTO for Hypothecation Cancellation. Sign up two forms of Form 35. Then buy a postal cover and paste 12 rupee stamp on it. Don't forget to write your name on the postal cover. After paying Rs.100 at the RTO, you will be given a receipt. Attach the receipt along with the original RC book, a copy of valid insurance and a valid emission certificate to the postal cover. You are advised to keep a photocopy of the RC book. Then submit it before Joint RTO. A receipt will be handed over to you as a proof. You will receive the RC book by post within one week.
Selling or buying in normal cases
Before buying or selling a used car, two transfer deeds (ownership certificate) must be signed by both seller (1st party) and buyer (2nd party) accompanying two witnesses' signature on them and the transfer deeds should be exchanged between them. Please remember to mention the time and date on the agreement when the vehicle was sold out. In order to change the ownership the current owner of the car should sign up on the Form 29 (2) and Form 30 (1), and must hand over to the buyer along with the RC book, insurance, tax token, pollution certificate and cess tax. Now hand over the vehicle only after settling the amount which was fixed earlier by both parties. Please make sure that the car is in the same condition when you fixed the rate for it. Transfer deeds must be kept safely for future necessities.
Police cases, check reports, compensative incidents, pending tax issues and such liabilities till the date when the car is sold will only be registered unchanged in the name of 1st party.
First party can use the No Claim Bonus of the current car to get reduction in the insurance amount while buying a new car.