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Saturday, July 31, 2010

Buying or Selling used vehicle - difference between Advanced and Developing countries

Vehicle brokers are oft repeated comedians in many cinemas. In a recent film, Vadivelu would influence a two wheeler owner to part his vehicle for a trial ride in the hope of some commission but would end up getting beaten as those who had come as buyers would take all for a ride, running away with the vehicle.
The single most common indicator used for quantifying the standard of living is the per capita purchasing power parity adjusted to gross domestic product and the standard of living in India has a large disparity. There exists a class known as ‘Indian middle class’ who are object of ridicule of many but most markets target them. Now the car market is booming with so many new models and newer versions. People upgrade to newer versions more because there exists a good market for used cars. Buying a second hand car has many advantages ; the cost is significantly lower, depreciation lesser, loans are available and vehicles are readily available. But the bane is the market is largely unorganised though there are some brands of used car sellers. Direct transactions between two individuals are also low.

The buyers are susceptible not only on the quality but sometimes on the ownership aspect also. If the common refrain is - yes, these are common issues of Third World countries – please read on.
European countries are advanced – UK is far advanced – a model place to live in ! ethical people – good governance – adherence to laws – most importantly adaptation of latest technology. There every one who uses a vehicle on road must keep it in roadworthy condition. The MOT test checks that vehicles meet road safety and environmental standards. The first test is required when the vehicle is 3 years old ; for taxi the rules are different. This Certificate would confirm that the vehicle meets the minimum acceptable environmental and road safety standards required by law. It is no guarantee of the general mechanical condition of the vehicle. Just as we have the Registration Certificate (RC) which was in book format earlier and now a mere Certificate, there it is known as V5C which is generally taken as the proof of ownership. Recently (July 2010) the Govt. has introduced a new, more secure, vehicle registration and has published instructions on line giving tips to general public on what to look out for when buying a second hand car, which underlines the prevalence of frauds and cheating of selling vehicles with fake nos. and registration certificates.

The V5C, commonly known as the ‘logbook’ is a certificate that is issued when a vehicle is registered with the DVLA. (Driver and vehicles licensing agency – our equivalent of RTO) The V5C is sent to the registered keeper who is the person responsible for registering and taxing the vehicle. This may not be the owner of the vehicle. The information contained therein includes the Regn. No., the keeper’s name & address, other details such as make, Vehicle Identification No. and the number of previous keepers.

The Transport Dept. has clarified that V5C is not proof of ownership as DVLA records keepers and not owners. The good thing is that these information can be found on line at Motoring section of which provides access to all public services in one place. Again there is a catch. In the early 1970s, DVLS began computerisation of records of vehicles previously maintained by local vehicle taxation offices. The record for old vehicles was closed in 1983. Subsequently in 1990 rules were introduced allowing vehicles to claim back their original mark on a non-transferable basis.

The flip side is : the introduction of new certificates follows the theft of a number of blank certificates in 2006. Some manipulators have succeeded in selling stolen or cloned vehicle with those certificates catching the buyer unaware. Thus criminals could legitimize the sale of a stolen vehicle.

Here are some of the useful tips put up for buying and selling used vehicle, most of which could prove useful in Indian context as well

When Buying used vehicle :
1) be careful of adverts quoting mobile phone numbers - owners are hard to trace watch out for adverts giving a landline number with specific times to call - it could be a phone box
2) find out the market value of the vehicle - if it’s being offered much cheaper, ask yourself why
3) find out where the vehicle’s stamped-in Vehicle Identification Number (VIN) should be so that you can check it against the vehicle registration certificate (V5C)
4) arrange to see the vehicle in daylight at the seller’s home and not in a public place such as service stations, pub car parks and petrol forecourts
ask to see additional identification
5) check whether the vehicle has outstanding finance, as this could affect your rights to the vehicle
6) ask to see proof of ownership such as a bill of sale
7) ask to see the vehicle service records and a MOT certificate.

When Selling used vehicle :
• it's worth remembering that thieves can pose as potential buyers
• never let the buyer go on a test drive alone as they may not come back
• don't leave the buyer alone with your keys in the ignition
• be careful when accepting cheques or banker's drafts, don't part with your car until you're sure the payment is genuine - if in doubt, contact your bank
• it's also worth asking the buyer for a form of identity, satisfying yourself that it looks genuine.Alternatively the buyer may ask to see proof of your identity'
• know where the VIN number is as the buyer may want to check this

Let the buyer beware is the norm – whether the Country is advanced or developing – cheating does take place and only those vigilant remain unharmed

Regards – Sampathkumar.


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