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
Seized bikes spend 3 to 6 month in stock yard without necessary maintenance
No lander care about the bike maintenance as sole purpose is to sell a bike
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.
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