Used car dealers to be deemed owners of their inventory: MoRTH

The Ministry of Road Transport and Highways (MoRTH) has issued a draft notification proposing amends to Chapter III of the Central Motor Vehicle Rules, 1989, to regulate the pre-owned vehicle market. The proposal mentions that pre-owned car dealers will be deemed as owners of the vehicles that they have in their inventory.

The ministry says the proposed rules are aimed at promoting ease of doing business and transparency in the sale and purchase of registered vehicles through dealers. 

• Dealers will have to maintain a trip register of each vehicle
• Such vehicles can only ply on roads for test drives, maintenance

As per the proposal, the owner of the vehicle, who is selling the car to a dealer, will need to notify the Regional Transport Office (RTO), either via online or offline mediums, and this will make the dealer a registered owner. Once in possession, used car dealers will need to get an authorisation certificate for registered vehicles which will be valid for five years.

Dealers will have to maintain a trip register for each vehicle in their inventory, and such vehicles can only ply on roads for test drives, maintenance, repair work and updating the pollution under control (PUC) certificates.

Furthermore, the proposed rules mention that the used car dealer will be solely responsible for any accident once the authorisation certificate has been issued. There is also a provision in the draft notification that if the RTO finds that the dealer has not complied with any of the criteria mentioned, their authorisation certificate may get suspended or cancelled altogether.

After the authorisation certificate has been issued to a dealer, they will be able to apply for renewal of registration certificates (RC), duplicate RC, certificate of fitness, no objection certificate (NOC) and transfer of ownership.

MoRTH’s new notification, once implemented, will help instil confidence in buyers and sellers of used cars. Many have faced issues such as late transfer of ownership, forged or incomplete documentation and wrongly issued challans. 

Also see:

Used car market to be twice as big as new car segment by FY2025

Online transfer of registration can boost used car business