Vehicle Payment and Purchase in India

Details on paying for a new or used vehicle in India, and the documents required to complete the transaction…

Paying for vehicles in cash is preferred, to minimise time and paperwork. Many independent dealers may insist on payment in cash. Get a formal receipt for any cash payments made.

Authorised car dealers and dealerships may accept local cheques, money orders, bank transfers and credit cards. Other financing options including bank loans and equalised monthly instalments (EMIs) are widely used to buy cars.

The following conditions apply for a car bought with a bank loan:

  • Bank loans can only be obtained by residents of India (regardless of nationality)
  • Buyers must have a guarantor who is also a permanent resident in India
  • Should the buyer default on a loan, the guarantor must be able to pay off any remaining debts

Required Documents

Independent dealers will not usually ask buyers for official documents, especially if the purchase is made using cash.

Authorised car dealers will ask the buyer to provide official proof of residence, proof of identity, and five passport-sized photographs. The following documents are acceptable forms of proof:

  • Passport
  • Driver’s licence
  • Ration card (issued by state governments)
  • Utility bill (gas, water or electricity)
  • House registration papers (for home owners)
  • Rent receipt or rental lease
  • Employer’s certificate (issued by an employer)
  • PAN card (10-digit number used for filing taxes)

If a car is bought with a bank loan or EMI, then a bank statement and proof of income must also be given to the dealer.

Registration and Car Insurance

Once a new or used vehicle is bought, it must be registered by the new owner within seven days of delivery. Car dealers will often assist customers with the registration process at the local branch of the state government’s Regional Transit Office or Authority (RTO or RTA). Car owners must have valid car insurance before they can drive the vehicle.

  • For more details about registering a foreign car see the Customs & Registration page
  • For more details about buying car insurance see the Vehicle Insurance page
  • Each state government’s RTO or RTA website has full information.