Why you should be careful while selling your car

So you've zeroed in on that car you want, got your finances in order, have made the booking and now need to get rid of your old car. Selling off an old car shouldn't be a big deal except for the price negotiation bit. This is what many of us think.

However, if you're not careful in your dealings while selling your old car, the joy of your shiny new ride may be overridden by the sorrow the ghost of your old car may bring.

Many fly-by-night operators may tempt you with a good price for your old car and assure you that the paperwork would be taken care of. But it does not turn out this way always as insurance consultant Ananya Ghose found out.

(Also read: Buying a used car? Here's what to look out for)

Ms Ghose sold her old car through a broker she met at a car dealership. But two years later she found out that the ownership transfer had not taken place. "We had sold off our old car through a broker we met at a dealership while getting our new car two years back. Although he was not associated with the dealership, the salesman vouched for him personally and we thought we had a good deal. Imagine my horror when somebody got in touch with me recently, as that car was being sold again and I found out the name transfer never took place," says Ms Ghose recalling how "anything could have happened".

Ms Ghose could have indeed landed in trouble, if her old car had been involved in any sort of crime or met with an accident.

A Maruti Suzuki dealer, who did not wish to be identified, says, "A lot of these car brokers give you the money and ask you not to worry and say that the paper work, name transfer etc. will be taken care of. But many of our customers have found out years later that the name transfer never happened, until the car was being resold again."

While selling a car it is very important to be diligent about the paperwork, stresses the legal community.

"Till the car is legally transferred to the new owner's name, you should not give away your vehicle. And if you do even in good faith, any unlawful activity or accident you'll be liable for," says lawyer Raminder Kohli.

He says that you should also keep a photograph of the person who's buying your car, a photo ID proof and the transfer letter from the Regional Transport Office (RTO).

If you don't have time for the paperwork yourself, you can sell through authorised used car dealerships like Maruti True Value, Mahindra First Choice and the like. In fact, almost all car companies these days have a buy-back facility these days.

(Also read: Top 10 FAQs on car loans)