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Buying A New Car: All You Need To Know About Paperwork

Modified On Jun 07, 2016 12:50 PM By Aman

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So it’s finally time to bring home the car of your choice. But, before you take the keys and celebrate, there is one important step to be taken care of – paperwork.

Most of us tend to skip this step, especially first-time buyers. Besides, this is one boring part that you are more than willing to let your father or an elderly figure handle. While it may seem like a daunting task, it’s actually quite simple if you follow the step-by-step approach towards paperwork given below. 

Finalising your car loan

Once you have narrowed down the car of your choice, it’s time to take matters to the table. If you are paying entirely in cash, then you may skip this step and start thinking about explanations to the tax authorities.    

If you are opting for a loan, ask for quotes from multiple banks. A lot of banks and lending authorities have tie-ups with dealers to offer easy loans. Or, you can check with your own trusted bank and authorities in case they have a better loan plan to offer.

What to watch out for

  • Ideal down payment: Normally, one should pay at least 15-20 per cent of the car’s purchase price as down payment and take up loan for the rest 80-85 per cent. However, there is no set rule. Depending on the car type and your budget, you can even extend the down payment to lessen the burden.
  • Lowest EMI is not always the best: One term that really attracts us is ‘Low EMI’. Don’t fall into a trap just because the loan plan has the lowest EMI amongst the rest. Read the entire loan process and check for processing fees, other one-time payments and tenure along with the rate of interest that you will have to pay. Once you have taken care of all the math, then finalise the loan that you want to opt for. To understand this better, check our car loan EMI calculator, enter the amount and get the EMI as per your plan.  

Documents required: The car will be under the name of the individual taking up loan till the time it’s not fully paid to the lending authority. You will need the below documents.

Identity proof: PAN card / Driving License / Passport / Aadhar Card / Voter’s ID

Address proof: Electricity bill / house purchase agreement / rent agreement (if you are on rent) / ration card

Income proof:  Bank statements for last six months / last three months’ salary slips / letter for loan closure (for previous loan except home loan) / last two years’ income tax returns      


Just as you compare a car with other options in the market, so should you when buying insurance. There are a lot of insurance companies offering multiple schemes for your car. Compare insurances to getter a better deal and do not let any dealership salesman pressurise you into opting for their in-house scheme.  

What to watch out for 

  • Dealership salesman is expert in selling cars, not insurance: A car salesman can sell you the best car, but there is no guarantee that he/she will offer you the best insurance deal. Don’t rely on their advice as it’s better to go for your own insurance plan.   
  • Dealership is not the only place to get your car insured: Don’t follow the myth about dealerships being the only place to get your new car insured. There is no mandate to buy insurance from the dealer no matter how much you are lured to go for one (unless it’s free or the plan is the best in the market). Always, consider options available in the market. Nowadays, everything is online, so don’t be afraid in saying ‘NO’ to the dealership and get your own insurance plan. 

Do the booking

Just when you have figured out the financial aspect, it’s time to sign the booking papers. Do remember, the car will be under the name of the person who is taking up the loan. Even if the car is for you but your father, mother or somebody in the family is taking up loan against the same, he/she has to make the booking then.      

Documents required:

The person doing the booking will have to show proof of identity, nationality and address as well. Below documents should suffice.

Nationality: Voter ID / Passport / School certificates 

Identity: PAN card / Driving License / Passport / Aadhar Card

Address: Electricity bill / house purchase agreement / rent agreement (if you are on rent) / ration card        

What to watch out for

  • Take everything in written: Make sure to get everything in writing. This should include the exact delivery date, exact price (both down payment and on road price), accessories, add-ons and discounts offered as well. 
  • What if you cancel the booking or if delivery is delayed: Always check in a subtle way about the clauses of booking – are there any charges involved in case you change your mind? Also what happens if the dealership doesn’t live up to the promise of the delivery date, will you get a refund? Clear all of this beforehand.    

Finally, before you get carried away in excitement and take the car out for a spin, check for the following documents:  

  • Receipts 
  • Permanent RC (Registration Certificate) or at least a temporary one
  • Insurance paperwork check (in case you are buying one from the dealership itself)
  • Pollution under control (PUC) certificate 
  • Manuals, service booklet (with free service coupons), warranty cards and roadside assistance number as well 

That’s it from us! Drive safe, follow traffic rules and let the celebrations begin...

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