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Is buying a recovered/ bank seized bike a smart decision?

Updated: Oct 1, 2020

In a past a few months, we have received multiple enquiries related to bank seized or repossessed/ recovered bikes, whether to buy or not to buy these vehicles and what are the common precautions needs to be taken while making a purchase decision.

Below, we have answered some commonly asked questions and uncovered related myths with recovered bikes.

Why to buy recovered bikes?

Attractive price and a vehicle as good as new (less driven and good condition) are the key reason to buy a preowned recovered bike.

Why bikes recovered from the actual owners?

A lander Banks or NBFCs (Non-banking financial corporations) generally recovered vehicles when original buyer unable to repay a loaned amount or default on an EMI, as par pre-specified terms and conditions in the loan agreement. In order to understand the process in chronological order:

  • Loan bank send a intimation notice to a buyer regarding the default on loan or EMIs, along with a warning related to potential vehicle seize in case buyer unable to pay the EMIs/loan

  • When original buyer unable to pay the EMI/Loan, as per the specified timeline. A lander bank recovered/seized the vehicle from the buyer. Original buyer also informed for the remaining dues and repay timelines. Normally banks/NBFCs give 3 to 6 month to original buyers to reclaim a vehicle. Generally these recovered bikes spend 3 to 6 months in stock yard before auction initiation

  • In case, original buyer unable to pay the loan or minimum dues, a lander bank/NBFC decides to auction a recovered vehicle in order to recover the loan amount

Three common issues with recovered bikes

  1. Seized bikes spend 3 to 6 month in stock yard without necessary maintenance

  2. No lander care about the bike maintenance as sole purpose is to sell a bike

  3. Most vehicle never receive essential ignition check in 3 months

Mechanical failures in recovered bikes

  • Although such bikes are very less driven but aesthetically are in very bad shape due to poor handling & storing

  • Many fragile parts such as battery, seat & tyre tube required immediate change

  • Recovered bikes require comprehensive servicing, including key part changes/repair such as chain kit, switches, wire harnesses etc.

Legal documents issue with recovered bikes

  • Lack of original RC - 90% of cases owner doesn’t hand over to lander at the time of vehicle recovery

  • Banks only provide loan settlement letter (NOC & RTA declaration) to the new owner, which is not enough for RC transfer and might require other applicable costs.

Autodealz recommendation

  • Check the recovered bike condition and its duration of stay in stock yard

  • Use professionals help to test the bike health, otherwise you might end up paying more to a mechanic than the actual recovered bike cost

  • Pay attention to the documents available with the bike such as check original RC (Chip RC is bring duplicated outside also which is not accepted in transfer)

  • Check vehicle details on m-wallet (RTO app) for quick verification

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