Scam or not: the buyer of a used car requests a copy RC and insurance for a loan

I am not comfortable sharing the documents before the transfer of ownership.

BHPian Tilt recently shared this with other enthusiasts.

A potential buyer of my car wants me to give him a copy of the RC and the insurance. He says it’s to enable him to get a loan from the bank.

I am not comfortable giving it to anyone until I have received full payment for the car and before transferring ownership to the buyer.

Is it a scam? I’m worried that the liability and/or insurance is being misused to deprive me of my money and my car – say a scammer could use my liability to get a loan somewhere and keep the money, then the lender will sue me for the car.

Is it a real requirement for buyers to buy a used car on loan?

What can I do to protect myself?

Thank you and well done

Here is what Graaja BHPian should say about it:

When I sold my Jetta, the buyer also asked for a loan. The banker (a private lender) came to my house with the buyer and inspected the car and the RC before approving the loan. I didn’t have to give them a copy.

Unless the loan is processed in your name and your signature is there in the paperwork, I doubt the bank can confiscate your car. If the car is in your name and the loan is in the name of the buyer, I also think the bank cannot confiscate your car. So it can be a real request.

Here is what BHPian gkveda should say about it:

Maybe a scam and probably, maybe genuine too.

We suggest you first check with an independent bank what documents are needed to process a used car loan. If the bank indicates that a current RC copy and a copy of the insurance policy are required to process the loan, the buyer may be genuine (please note: possibly)

In a second step, find out about the bank from which the buyer takes out the loan and go to the bank with the buyer. If the bank requests the said copy of the documents, deliver the copy of the documents directly to the bank and ask them to give the acknowledgment that they have received the copy of the documents for the purpose of sanctioning a loan on behalf of the bank. Buyer and bank may not hold current owner responsible for loan collection or use copies of documents for third party sanctioned loan collection.

Then you will have all the necessary evidence to prove that you gave the copies of the documents to the genuine bank for a specific purpose.

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

Here is what BHPian KA18 should say about it:

Most of us have mixed opinions on this.

As an insurance agent, I have RC and insurance copies from many of my clients.

There’s practically nothing I can do with the documents, much less try to scam people.

Unless someone grabs a stolen car and tries to pass it on to someone by falsifying the documents using your RC as a basis, which seems highly unlikely.

Why not request a copy of the buyer’s ID proof like Aadhar, PAN card, driver’s license, etc. ? This way you can be sure who is taking the papers.

If you are apprehensive, ask him to make an agreement on stamped paper of minimal legal value stating the purpose of taking the copies of the documents and having it notarized.

Regarding your doubt, it is not possible to take a loan only on the basis of the RC and the copy of insurance, even if it were possible, the loan will only be sanctioned to the owner of the RC and to nobody else.

As long as the originals stay with you, this shouldn’t be a problem.

Here is what BHPian abhishek46 should say about it:

Buyer can’t do anything with your xerox RC copy & insurance.

As long as the original RC card is with you and you haven’t signed the RTO transfer form, the car is yours, by all means.

Check out BHPian’s comments for more ideas and information.

Comments are closed.