Buying a car under hypothecation

BenjiRoss · 12th April 2010, 13:16

Quote:

Originally Posted by GTO

The only benefit I foresee is that, turnaround time will be lesser as both transactions (foreclosure + new loan) are from the same bank.

Exactly as I have written - it will be a new loan.
What surprised me is that the manager told me that the bank would take care of the document changes, etc that are needed - so I don't need to go about changing the name, getting NOC etc. Not sure if he knew what he was telling!

kuttapan · 12th April 2010, 13:39

What happened when I sold my Swift -

The buyer paid the amount in full to me by cheque(I had the car even while the chequer was being cleared), I foreclosed the loan(SBI waives the foreclosure charges if funds come from your own account), got the hypothecation cancellation papers and handed over the papers to the the buyer.

Now that I think of it, the buyer must have had supreme confidence in me to give me the full price of the car. Or, supreme confidence in himself, that he could break my legs if things went wrong

. It helped that the buyer was from T-bhp, but I guess it is not easy to trust anyone.

Best option is to make the buyer pay the cheque to financial institution directly and that seller handles all the paperwork.

BenjiRoss · 12th April 2010, 16:20

How long did it take to get the hypothecation cancellation papers

sreedotk · 12th April 2010, 17:27

I am just adding my experience here. I sold my car to a Maruti True Value Dealership and i still had 1 year if EMI's Left. The true value dealership paid the foreclosure amount and held 20K further and paid me the rest of the money the day they took my car . After 15 days when the NOC was issued they paid the rest of the money reducing 700 Rs for RTO charges and for the legwork they did. It was a hassle free exercise for me considering that i wanted to sell and move out in a weeks time.

kuttapan · 15th April 2010, 21:48

Quote:

Originally Posted by BenjiRoss

How long did it take to get the hypothecation cancellation papers

SBI gave me the cancellation papers the same day I closed the loan, but they made feel like a second class customer in the process.

rki2007 · 26th December 2010, 14:32

I am planning for a used car from true value of Hyundai. How do i know that the car is hypothecated, because usally the hypothecation entry is not made in the Smart card issued by the RTO.

Thanks in advance

veyron_head · 13th December 2012, 16:48

Quote:

Originally Posted by rki2007

I am planning for a used car from true value of Hyundai. How do i know that the car is hypothecated, because usally the hypothecation entry is not made in the Smart card issued by the RTO.

Thanks in advance

Bumping up this thread. I have the same question. I dont see the hypothecation in my smart card RC. Where else is it mentioned.

By the way, Can I continue to pay the car loan after the car is sold (and yet sell the car to another buyer in a separate transaction)? Sorry if its a stupid question. My knowledge is zilch in this area.

comfortablynumb · 13th December 2012, 21:51

Quote:

Originally Posted by veyron_head

Bumping up this thread. I have the same question. I dont see the hypothecation in my smart card RC. Where else is it mentioned.

By the way, Can I continue to pay the car loan after the car is sold (and yet sell the car to another buyer in a separate transaction)? Sorry if its a stupid question. My knowledge is zilch in this area.

Sorry, I don't have an answer to either of your questions, but here are a couple of threads that might be of help:

http://www.team-bhp.com/forum/indian...emoval-12.html

http://www.team-bhp.com/forum/owning...-guide-11.html

Cheers,
Vikram

Sunilrj · 14th December 2012, 15:59

Quote:

Originally Posted by veyron_head

Bumping up this thread. I have the same question. I dont see the hypothecation in my smart card RC. Where else is it mentioned.

By the way, Can I continue to pay the car loan after the car is sold (and yet sell the car to another buyer in a separate transaction)? Sorry if its a stupid question. My knowledge is zilch in this area.

The Smart card contains only certain Basic Details. The details of the Hypothecation are available with the RTO. you need to Pay Rs. 10 - 20/- and get a 'B' Extract. this is what the banks as you to do after they grant a loan to make sure that their charge is entered.

Alternatively you can also see your vehicle particulars, along with HP details on https://vahan.nic.in/nrservices/face...rchDetails.jsp

As regards your second question the answer is NO. if the car is sold it needs to be transferred to the new owner ASAP. in case the Transfer is not done, and the car is used for nefarious activities you will be in Big time Trouble.

Further when the car is sold, the buyer would want to have the car transferred to his name. the RTO will not Transfer unless the NOC/HP cancellation letter is received from your bank. and NOC is given only when the Loan is cleared/ Closed

ani_meher · 17th April 2013, 12:59

If one buys a used car which is currently under hypothecation, can the smartcard be directly transferred to new owner's name with hypothecation removed, with NOC from bank submitted with the application?

Or does it have to be a two step process, first to remove the hypothecation and get a new card for first owner, and then use that card to transfer ownership to second owner?

ank.nsit · 15th November 2013, 10:02

Quote:

Originally Posted by GTO

Spot on, Dhiman! Thanks for sharing your experience. This is exactly how it should work. Of course, you would have taken the owners signature on the transfer papers at the time of driving away with the car?

Even if I pay the whole loan amount upfront to the owner & take the owner's signature on transfer papers/seller/buyer agreement & take the car with me, there's still a chance that the buyer might not make the payment to the bank, hence the car will not get transferred to my name as the RTO needs the NOC.

If I make the payment directly to the bank, & take the car along with the onwer's signature on all the documents, then what are the possibilities/chances of any fraudulent activity that could be carried out by the owner, as there will be a time gap in between the payment of the amount & the issuance of the NOC?

The ideal situation that I can think of is paying cash to the Bank, so that they can immediately realize the loan amount & issue the NOC at the same time.

Any other suggestions on how to buy a car under hypothecation & when the owner does not have the money to pay the loan upfront?

Also, does anyone know if Kotak Mahindra allows transfer of car loan?

carzealot · 12th December 2013, 20:47

Whether or not the smart card has the hypothecation details, The insurance copy of the car will always show up the hypothecation details. Make sure post getting the vehicle registered on your name you get the policy under your name and have the insurer remove hypothecation details else in case of total loss of the vehicle or theft the insurer will pay the value of the car to Insurer and not you. As they will think that you are still not a legal owner of the car.

raveesh_k · 2nd February 2016, 13:34

Hi,

I have recently closed the loan and have the NOC and Form 35 with me from the Bank. Now that I wish to sell the car, will it be ok to hand over my original RC, along with NOC and form 35 to the buyer so that he can get the hypothecation removed and transfer the ownership in his name at the same time?

Rgds
Raveesh

petrolhead_chn · 14th July 2017, 05:47

Bumping an old thread

If one wants to buy/sell a car which is a year old and is loaned by a bank, what are the best ways?

1. The buyer is ready to pay the total outstanding in cash/cheque to the seller
2. The buyer wants to take delivery of the car along with a copy of RC as soon as the amount is realized
3. The buyer is willing to wait for the seller to carry out the loan closure/NOC procedures

Is it safe to handover the vehicle to buyer without transferring the ownership or even before getting the NOC?

What is the best way to handle this situation for a win-win outcome for both seller and buyer?

ObsessedByFIAT · 14th July 2017, 06:04

Quote:

Originally Posted by petrolhead_chn

If one wants to buy/sell a car which is a year old and is loaned by a bank, what are the best ways?

From my own experience dealing with a similar situation -

I sold off my car which still had a year worth of EMIs pending to Mahindra First Choice.
They cleared off the outstanding loan amount (deposited the amount with the bank), gave me the remainder of the amount as a cheque. Once that was realized, I handed over the RC and bank's NOC to be deposited at the registered RTO. All this while, they only had a photo copy of the RC. I had already told them that until the amount is credited in my account and the bank loan is closed, the car will be in my custody. As a gentle promise, I did not use the car until the entire process was completed.

I too had apprehensions about how the entire thing will work out; however, full marks to the First Choice contact person, who helped me sort out and smoothen the deal.

12th April 2010, 13:39	#17
kuttapan Senior - BHPian Join Date: May 2007 Location: Melbourne Posts: 1,155 Thanked: 27 Times View My Garage	What happened when I sold my Swift - The buyer paid the amount in full to me by cheque(I had the car even while the chequer was being cleared), I foreclosed the loan(SBI waives the foreclosure charges if funds come from your own account), got the hypothecation cancellation papers and handed over the papers to the the buyer. Now that I think of it, the buyer must have had supreme confidence in me to give me the full price of the car. Or, supreme confidence in himself, that he could break my legs if things went wrong . It helped that the buyer was from T-bhp, but I guess it is not easy to trust anyone. Best option is to make the buyer pay the cheque to financial institution directly and that seller handles all the paperwork.
	(1) Thanks

12th April 2010, 16:20	#18
BenjiRoss Senior - BHPian Join Date: Jul 2008 Location: Tamilnadu Posts: 1,070 Thanked: 1,335 Times	How long did it take to get the hypothecation cancellation papers
	() Thanks

12th April 2010, 17:27	#19
sreedotk BHPian Join Date: Dec 2006 Location: Chennai Posts: 248 Thanked: 90 Times	I am just adding my experience here. I sold my car to a Maruti True Value Dealership and i still had 1 year if EMI's Left. The true value dealership paid the foreclosure amount and held 20K further and paid me the rest of the money the day they took my car . After 15 days when the NOC was issued they paid the rest of the money reducing 700 Rs for RTO charges and for the legwork they did. It was a hassle free exercise for me considering that i wanted to sell and move out in a weeks time.
	() Thanks

26th December 2010, 14:32	#21
rki2007 BHPian Join Date: Nov 2009 Location: Bangalore Posts: 670 Thanked: 143 Times	Re: Buying a car under hypothecation I am planning for a used car from true value of Hyundai. How do i know that the car is hypothecated, because usally the hypothecation entry is not made in the Smart card issued by the RTO. Thanks in advance
	() Thanks

17th April 2013, 12:59	#25
ani_meher Senior - BHPian Join Date: Oct 2008 Location: Pune Posts: 1,988 Thanked: 4,101 Times	Re: Buying a car under hypothecation If one buys a used car which is currently under hypothecation, can the smartcard be directly transferred to new owner's name with hypothecation removed, with NOC from bank submitted with the application? Or does it have to be a two step process, first to remove the hypothecation and get a new card for first owner, and then use that card to transfer ownership to second owner?
	() Thanks

12th December 2013, 20:47	#27
carzealot BHPian Join Date: Dec 2013 Location: Gurgaon Posts: 42 Thanked: 20 Times	Whether or not the smart card has the hypothecation details, The insurance copy of the car will always show up the hypothecation details. Make sure post getting the vehicle registered on your name you get the policy under your name and have the insurer remove hypothecation details else in case of total loss of the vehicle or theft the insurer will pay the value of the car to Insurer and not you. As they will think that you are still not a legal owner of the car.
	(1) Thanks

2nd February 2016, 13:34	#28
raveesh_k BHPian Join Date: Oct 2012 Location: Düsseldorf Posts: 104 Thanked: 422 Times	Re: Buying a car under hypothecation Hi, I have recently closed the loan and have the NOC and Form 35 with me from the Bank. Now that I wish to sell the car, will it be ok to hand over my original RC, along with NOC and form 35 to the buyer so that he can get the hypothecation removed and transfer the ownership in his name at the same time? Rgds Raveesh
	() Thanks

14th July 2017, 05:47	#29
petrolhead_chn BHPian Join Date: Apr 2013 Location: Hmmm Posts: 325 Thanked: 154 Times	Re: Buying a car under hypothecation Bumping an old thread If one wants to buy/sell a car which is a year old and is loaned by a bank, what are the best ways? 1. The buyer is ready to pay the total outstanding in cash/cheque to the seller 2. The buyer wants to take delivery of the car along with a copy of RC as soon as the amount is realized 3. The buyer is willing to wait for the seller to carry out the loan closure/NOC procedures Is it safe to handover the vehicle to buyer without transferring the ownership or even before getting the NOC? What is the best way to handle this situation for a win-win outcome for both seller and buyer? Last edited by tsk1979 : 14th July 2017 at 05:58.
	() Thanks