Hidden Costs While Buying a Pre-Owned Car in India

What You Need to Know

The used car market is indeed touching heights in the automobile industry. More people are willing to buy a pre-owned car than before. You will find better deals and great discounts in the used car industry. In simpler terms, you can buy a bigger car for a lesser price if you plan and buy it in the used car segment. However, if you are a novice and have little to no knowledge about the industry, buying a pre-owned car can be tricky.

From various market tactics to dealers trying to levy more costs on you, there are things you need to keep in mind while purchasing a used car. You can save yourself a lot of money and hassle if you are aware of the costs that can come down the lane for you while buying a used car. Therefore, if you want the purchase to be light in your pocket and satisfying to your heart, read on. Here are some used car costs that you must know before you dive into the used car market to purchase one.

Hidden Costs While Buying a Used Car

Dealership Fees

This is one of the most common additional costs levied on used car buyers. Dealers also have to make an income out of selling pre-owned cars. This cost is hidden under various segments including documentation fees, delivery charges, advertising fees, and preparation fees. The list can seem never-ending! Well, the trick here is that these charges are negotiable, and not many people know about it.

Steal Deals and Offers

Never forget that a good deal is when you get a good-conditioned car and not when you get a lightening deal on a used car. Make sure you do extra research and check when the price of a car is less than you expected it to be. Do not blindly trust steal deals as they will most often have something fishy. This is the reason why you should only and always buy used cars from reputed dealers and not get tricked by deals and offers.

Maintenance

This is another deal breaker when it comes to hidden costs in used cars. Also, buying the wrong used car can hit you twice with the hidden costs of maintenance – once when you make the purchase and then once you have bought the wrong car. The first instance is when the dealership person tells you that the car has to undergo some basic maintenance like an oil change and wash before delivery. First thing first, you should be able to buy a used car without burning a hole in your pocket. If several maintenance-related works need to be done before the delivery of the vehicle, it is best to inspect and make an informed decision on whether or not to buy the vehicle in the first place. Secondly, if you happen to buy the wrong car, you will have to shell out a lot more money in the future to repair the car and its faults as time goes by. That will not only stress you as an owner and buyer but will also stress you out financially. It is very important to inspect the car with a proper mechanic before buying a used car.

Insurance and Financing

These are costs that you cannot get rid of but can save a huge chunk of your money on. You do not always have to follow what the dealer says blindly when it comes to insurance and financing of the vehicle. Most of the car dealers will have tie-ups with lenders and financiers that benefit them and not you much. Therefore, do your research and understand better about the financial aid you can avail of while purchasing a used car.

One thing you can do as an individual is to save up and pay a huge amount as a down payment. This can save you a lot of additional money while financing the vehicle.

Taxes and documentation

Taxes can be overwhelming if you are not prepared for it. Again, do your research and understand how much tax is levied in the region you stay in. Make sure you are aware of the documentation charges for title transfer and so on after the purchase of the used car. The costs may vary from state to state.

Charges that You Must Know About

Documentation fee

This surge is charged by the used car dealer in place of the services rendered by him. The price range for documentation fees varies from dealer to dealer. You can inquire about the surges with your car dealer to know how flexible and negotiable it is.

Reconditioning fee

The reconditioning charge is nothing but the implicit fee that covers the expenses taken up by the car dealer to get the used hand car ready for purchase after he has bought it from the first owner and verified all the necessary credentials.

Car upgrades

Car upgrade charges are levied by the dealer for any car upgrades that have been made to the used \ car by him. You can inspect these upgrades and verify the pricing for the same. You can choose to accept or leave these upgrades to balance the costs of buying a pre-owned car.

GAP insurance

Guaranteed Asset Protection or GAP insurance is the additional insurance that bridges the gap between the financial value of the vehicle and its actual value in case of theft or any other misfortune. You can choose to let the car dealer get GAP insurance for you or not, and accordingly decide to pay.

Sales tax

Sales tax is something you cannot negotiate. It is a charge that is levied following the laws of your state. It is included in the cost of a used car.

Extended warranty

If the used car that you purchase from the car dealer no longer falls under the ambit of the manufacturer’s warranty, then the car dealer can offer you an extended warranty. The cost of the same is one of the hidden surges when buying a pre-owned car.

The Bottom Line

Purchasing a pre-owned car can be a wise decision if you are fully aware of the hidden costs and fees that come with it. It is important to research and negotiate with the dealer or seller to avoid paying unnecessary fees. Right from dealership fees to maintenance charges, financing, taxes, and documentation surges, numerous hidden charges can make buying the car more expensive than you would have initially planned. Only with proper knowledge and negotiation skills, along with a fair idea of how the used car market works, can you save yourself a lot of money and hassle while making the purchase. Always make sure you choose reputed and verified car dealers and sellers and inspect the car carefully before buying.