[tilt]

Mods: please move this to an appropriate forum in case this is the wrong one, thank you.

A prospective buyer of my car wants me to give him a copy of the RC and Insurance. He says it is to enable him to get a loan from the bank.

I am not comfortable giving this to anyone before I receive the full payment for the car and before I transfer the ownership to the buyer.

Is this a scam? I am concerned that the RC and/or insurance could be misused to deprive me of my money and my car - say a scammer could use my RC to get a loan somewhere and keep the money, and then the lender comes after me for the car.

Is this a genuine requirement for buyer to buy a used car on loan?

What can I do to protect myself?

Thanks and cheers

[gkveda]

May be a scam and probably, may be genuine too.

Suggest you to first check with an independent bank as to what documents are required for them to process a used car loan. If the bank says current RC copy and insurance policy copy is required for them to process the loan, may be the buyer is genuine (Please note: May be)

As a second step, find out which bank the buyer is taking the loan, and visit to the bank along with the buyer. If the bank asks for the said copy of documents, handover the copy of documents to the bank directly and ask them to give the acknowledgement stating they have received the copy of documents for the purpose of sanctioning loan to the buyer name and bank can neither hold the current owner liable for recovery of loans nor use the doc copies for recovery of loans sanctioned to third party.

Then, you will have all necessary evidence to prove that you handed over the copies of docs to genuine bank for specific purpose.

And with this, bank will also not be able to come to you if in case the buyer does not purchase your car.

[condor]

Alternately, go with him to the bank and show the documents to the bank officer. This way you dont have to give the documents to the prospective buyer, and yet can fulfill the requirements of his bank.

Btw, how old is you car ?

Have you checked which bank does he plan to take a loan from ?
What is the tenure he is looking at ?
If you have these two answers, you can go to a branch of that bank and verify these two points. Compare that with the age of your car. Reason I say this is, banks may have their guidelines about the cut-off for age of used car vs loan tenure.

example:
If a bank says the loan must be closed by the time the car reaches 8 years, and your car is 5 yrs old now, the tenure may be for a max of 3 years.

Check on these lines too.

Note: I have not taken a loan for a used car.

[graaja]

When I sold my Jetta, the buyer had also applied for a loan. The banker (some private lender) visited my place along with the buyer and inspected the car and RC before sanctioning the loan. I did not have to give them any copy.

Unless the loan is processed in your name and your signature is there in the papers I doubt if the bank will be able to confiscate your car. If the car is in your name and the loan is in the buyer’s name, then too I think the bank cannot confiscate your car. So this can be a genuine request.

[jetsetgo08]

Doesn't appear to be a scam, as the bank does not usually approve the loan without inspecting the property(car) through 3rd party. But, as a reference, banks usually consider the IDV(depreciated value of the car) amount as a reference amount for used car loan.

[abhishek46]

The buyer cannot do anything with your RC xerox & insurance copy.

As long as original RC Card is with you, and you have not signed on the RTO Transfer Form, the Car is yours, by all means.

[nik0502]

Hi tilt,

I bought a used Fiesta in 2010. I opted for a bank loan through HDFC. The bank took the original RC and signed transfer form from the owner for transfer of ownership without paying a single penny to me or the seller. Thankfully the seller was very cooperative and gave me everything against a post dated cheque. So I believe if the buyer is asking for a copy it should not be a problem.

[tilt]

Thank you all for responding and giving helpful information.

I also spoke with a friend who works in a bank, loans dept. She said that banks do ask for these documents in order to provide to a professional valuator to evaluate what the car is worth; so that they may decide the amount of the loan etc.

However, she said that i could hand over the documents direct to the bank instead of to the buyer, just like some of you here have suggested.

Originally Posted by condor

*SNIP*

Btw, how old is you car ?

Have you checked which bank does he plan to take a loan from ?
What is the tenure he is looking at ?
*SNIP*

My car is a 2015 (it's here in the classifieds).

And no, I did not check which bank, but he did send me a chat screenshot he had with Axis; and he spoke with HDFC (supposedly, I cannot verify if it was really HDFC or some friend pretending to be from HDFC); and both times I saw (and heard) that these papers were being asked for.

Cheers

[condor]

One practice I have seen people do is:

on the photocopy of the document, write in large letters, the purpose. Many do it like how they write "cancelled" on a cheque leaf.

[adisan]

My two cents:

Having read about various cases where people come up with ingenious ideas to con others, I would rather stay away from such a buyer. My preference would have been to wait and find another buyer, even if it took a bit of time.

[KA18]

Most of us are giving mixed views about this.

I being an insurance agent, have RC and insurance copies of many of my customers.

There is hardly anything that I can do with the documents, let alone trying to con people.

Unless someone is making away with a stolen car and trying to pass it on to someone by forging the documents using your RC as a base, which seems highly improbable.

Why not ask a copy of the buyer's identity proof like Aadhar, PAN card, driving licence etc.? This way you can be sure who's taking the papers.

If you are apprehensive, ask him to make an agreement on stamp paper of minimum judicial value stating the purpose for taking the copies of the documents and get it notarized.

Coming to your doubt, it is not possible to take a loan based on just the RC and insurance copy, even if it were possible, the loan will be sanctioned only to the RC owner and not anyone else.

As long as the originals stay with you, it should not be a problem.

[adisan]

A BHPian has documented a similar experience in another thread:

https://www.team-bhp.com/forum/shift...-buyers-2.html (OLX fake ad victim - Do NOT ever share a pic of your RC book with online buyers)

[salmanz1992]

A duplicate copy of your original documents shouldn't be an issue. Plus you can mention on those copies, the purpose i.e., for loan purposes, bank name, buyer name. For additional security, you can accompany the buyer as others have mentioned.

As per my knowledge, without the copies, no bank would go forward with the loan process. So yes providing those documents is a necessity in this case.

[anandseth01]

Originally Posted by tilt

[b]

A prospective buyer of my car wants me to give him a copy of the RC and Insurance. He says it is to enable him to get a loan from the bank.

I am not comfortable giving this to anyone before I receive the full payment for the car and before I transfer the ownership to the buyer.

This is quite normal, the DSA's want to make sure that the documents are complete and no other loan or challan exists on the particular vehicle. When I sold my Ciaz last year, the bank of the buyer sent a representative to take pictures of the car, including a selfie with the number plate visible. The pictures are loaded onto their internal bank app. Asking the seller for a copy of the documents is normal and expected for such deals. In fact, a buyer taking a loan should be preferred by you as the bank mandates them to transfer the RC and get the hypothecation done within 15 working days.

[aashishnb]

Originally Posted by tilt

[b]
A prospective buyer of my car wants me to give him a copy of the RC and Insurance. He says it is to enable him to get a loan from the bank.

Giving copy should not be an issue - in fact copy of RC is the first thing brokers share with prospective buyers apart from vehicle pics. Also, insurance documents is the first thing a buyer would want to inspect to try & find if there was any earlier claim/accident. Cannot be used for anything.

As additional protection:
1. Close your transaction first - commercials, etc. so that sale is only pending balance payment from loan. In any case, buyer will not get loan for full 100% of purchase price.
2. Instead of a copy, take a photo at an angle holding it in hand - finger/thumb can be in the photo + at an angle which means anyone can clearly identify it is a pic and not original or even a photocopy o original.