What are the various steps involved in buying a car in India?

We are not living in the pre liberalized era anymore and today, the buyer has loads of choices in the market to buy from. With almost all major international brand players having presence in the market, this couldn’t have been a better time to buy a car. What’s more, the recent pandemic has slowed down the market, with a decline of over 2%. This imbalance in the demand and supply has put buyers in a favorable position now, and they have more bargaining power than ever. However, before you take the big plunge of buying a car, you must take care of a few essential things. For the majority of us, buying a car is a giant leap in our life, and you do not want to ruin it with a bad expensive choice. So here are some pointers for you, to make your car buying experience a smooth one.

“Porsche 356 SC set” by pedrosimoes7 is licensed under CC BY 2.0

1. Do your homework

No, I am not talking about the homework we used to do after school. By homework, I mean to do proper research about your purchase. Ask yourself questions such as what is your requirement, what kind of vehicle you want, what kind of safety it should have etc. In our Indian society, the car buying decision is based on herd mentality and as a result, one often ends up buying a vehicle that doesn’t suit one’s requirements. For example, if you have a family of two, then going for a MUV like a Toyota Innova would not make financial sense at all. Take your time and scout the internet, check how the vehicle will perform in the long run and whether the car is maintenance-friendly or not. Good websites such as Team-Bhp are a great resource to research your dream car.  Also, learn about the manufacturer you have selected, you do not want to buy a car from a manufacturer, for example, GM India, that is just about to pack its bag.

2. Set your budget right

The most important tip on a car buying guide. The expenses on a car don’t end after paying the on-road price, it is just the start of expenses. Even if you do not use your vehicle at all, there will be minimum upkeep expenses such as insurance associated with your vehicle. Then comes the cost of depreciation, fuel costs, service costs, etc. As a general rule, the total expenses of your vehicle should not cross 10% of your gross annual income, to keep the finances under check. In this case, the internet is your best buddy to help you research all these parameters. Coming to the finance side, if you can pay upfront, then go with that option. With a car loan, you will lose a ton of money that could have been invested somewhere else. You should never blindly go with dealer-provided insurance, always compare prices yourself on the internet and if the dealer is charging more, then ask him to match the price. 

3. New or used car?

Surely no one can resist the smell and the tight feel of a new car. A new car has its charm and in our Indian society, a higher pride is attached to a new car. But if you keep these things aside for a moment and think like a prudent man, then going in for a second-hand car makes much more financial sense. Do you know that you can save up to 50% on a car purchase by going with a second-hand car? This is because the majority of the depreciation hit has been taken by the first owner. The market is filled with tons of options for cars less than 3 years old that are still under manufacturers’ warranty. With your set budget, you can easily jump a category or two in the second-hand market. For example, you can have a good D segment car like Corolla for the price of a large-sized hatchback.

 4. Zeroing on the car dealership

If you have decided about your car and the brand has multiple dealerships in your city, then investigate and compare what all they have to offer. By doing that, you will have greater bargaining power and you can negotiate a great deal. Also always check the invoice regarding what expenses they have added. Most of the time, they add unnecessary stuff like Teflon coating or engine coating, etc. you can tick off all these extra stuff and bring down the price. There is no rule that you have to buy insurance from a dealer only, you can have your insurance too. These days, the car dealers have power from the RTO to do a dealer point registration and you can have your car registered on the same day.

5. Have a proper test drive

Never purchase a car based solely on the opinion of another person, even if that person is a world-renowned car expert. Think of things such as comfort in the driving posture and engine response, which may be terrific for someone but a bad choice for you. Go on a comprehensive test drive involving traffic, on open roads and downhills. A one-kilometer test drive will not reveal much about the car. So be patient about it and take your time. A car is a lifelong investment for some and you do not want to buy something that you are not comfortable with. 


Although in the present era, where you can buy a car online with a click of a button, in reality, buying a car is not that easy. There are a lot of ifs and buts involved, and you have to solve them first to have a fulfilling ownership experience, so it is important to look at a car buying guide before purchasing. In the buying process, the internet is your best friend, and you should use it rigorously to make your research more meaningful. Don’t rush the buying process under peer pressure. Take your sweet time and have a companion in the form of a vehicle.