Buying a Car in India

The car market in India has recently opened up to offer a wide choice of both Indian and foreign cars. You can buy anything from the Tata Nano (widely touted as the world’s cheapest car) for Rs. 120,000 to a Rolls Royce for Rs. 25,000,000 and everything in between. The price range for hatchbacks is Rs. 120,000 – Rs. 500,000, mid-size sedans range from Rs. 600,000 – Rs. 12,00,000 and luxury sedans range from Rs. 14,00,000 – Rs. 45,00,000. SUV’s start at Rs. 900,000 and go up to Rs. 60,00,000. Prices quoted by dealers will be ex-showroom, and there are usually extra charges for insurance, registration and tax, which the dealer will also inform you about. Most people own their cars, and there are not many leasing options, but if you are coming to India on a work contract, you might want to check ahead whether your contract includes a car and driver, as many work contracts for higher level executives will include this and you may not need to buy your own car.

All major car manufacturers have several dealerships in Bangalore, who will offer test drives and advice on buying a new car. You can also ask a dealer to bring a test car to your house. If your stay in India is 2-3 years, it makes sense to buy a new car, and sell it when you leave, which is often possible through the same dealership you bought it from. The only disadvantage is that foreign nationals usually cannot get loans from Indian banks, so you will have to buy the car outright.

If you are staying in India for a short period, buying a second-hand car might be a better option, as this generally costs 50% less than buying a new car. When doing this, it is better to buy your car from a dealership rather than from an individual because of the paperwork involved. The used car market has become quite streamlined in the past few years, and several reputed companies offer quality-checked used cars, that come with a one-year warranty and a couple of free services. If you are buying a car from a dealer, whether second-hand or new, the dealer will register the car for you and arrange insurance, which is mandatory.

Major car companies/dealerships:

Used car dealerships (buying and selling):

Buying Privately

Although it is not recommended, you may wish to buy a second-hand car from an individual. In this case, it is a good idea to check Craigslist Bangalore or find out through expat networks whether any departing expats are selling their car.

When you buy a car from an individual, there are several things you need to make sure of:

  • Registration papers/RC Book. Check that these are available. If the car was registered in any State other than Karnataka, there is a lengthy re-registration process where the Road Transport Office (RTO) of both states need to be informed.
  • RTO tax. This is a lifetime tax paid by the first owner of the car. The person selling the car will need to provide this receipt to you. If this has not been paid, the tax payable may be tens of thousands of rupees.
  • Road tax payment: Make sure that annual road taxes have been paid, and receipts are in order.
  • Insurance: Make sure insurance payments are up-to-date, and transfer the insurance to your name.
  • Invoice/Owner’s Manual: Ask for the original invoice and owner’s manual.
  • Finance clearance: Check that there are no outstanding loans to banks. Ask for the No Objection Certificate (NOC) from the finance company, if the car was financed.

Registration & Other Formalities

Registering a new car is a complicated process, but thankfully one that the dealer you buy the car from will do for you. They will normally hand over the car to you after it has been registered, and you have been issued number plates. You will need to provide:

  • Proof of address. This could be a telephone bill/rental agreement.
  • Your PAN (Permanent Account Number) with the tax authorities in India, if you are registered for tax in India, or sign a form saying that you are not registered for tax in India.

The dealer will then provide you with the following documents along with your car:

  • RC book. This is the car’s registration papers, showing the current owner of the car, and describing the car.
  • Lifetime RTO tax receipt. You will have to pay this tax, which will be part of your total purchase price.
  • Pollution check sticker stating that your car’s emissions are within norms.
  • Insurance papers. Again, you will have to pay this, but it will form part of your total purchase price. See the ‘Insurance’ section for details.
  • User’s Manual and Warranty. Check that all details are filled in. Most new cars also come with a stipulated number of free services.
  • Warranty for tyres and battery, if separate.

For used cars, the documents required are the same, but you will need to do the registration yourself at the RTO (Road Transport Office) nearest to your residence. The original owner must provide the RTO where the car was registered with information about the new owner within 14 days. In case the RTO where you reside is different from the owner’s, he/she will have to inform your RTO as well. Once the RTO acknowledges receipt of this, the seller is free from taxes and liabilities associated with the car. You will need to sign a delivery note, confirming that you are in possession of the car.

The following documents have to be submitted to the RTO to complete the transfer of ownership:

  • Form “TCA” – Intimation of transfer by buyer
  • Form “TCR” – Intimation of transfer by seller
  • Form No.29 – Notice of transfer of ownership of vehicle.
  • Form No.30 – Report of transfer of ownership of vehicle.
  • Valid Insurance policy
  • PUC Certificate
  • Address proof of the the buyer
  • Evidence of payment of all taxes up-to-date.
  • Form No.28 – Application for No Objection Certificate

The number plates generally remains the same, unless you are buying a car registered in another state. No appointments can be made at the RTO, you need to go there, request all the forms and then submit them in person, or by engaging an agent, who can usually be found at the RTO office. Because of the complexity of the procedure, as is evident, it is advised not to attempt to register a car by yourself.

To find your local RTO address, visit their website: and select ABOUT US, then JURISDICTION OF RTOs. Find your area in the long list, and report to the address listed there.