Pre-owned car market in India: Rules Modified to Promote Ease of Doing Business
Attribution: Yash Y. Vadiwala, CC BY-SA 3.0 , via Wikimedia Commons

Currently, the fast-growing market of sale and purchase of registered vehicles through dealers faces issues like problems during transfer of vehicle to subsequent transferee, disputes in regard to third party damage liabilities, difficulty in determination of defaulter etc. To address these and to promote ease of doing business in pre-owned car market, the government has now amended Chapter III of Central Motor Vehicle Rules, 1989 to build a comprehensive regulatory ecosystem for the pre-owned car market. The new rules aid in recognizing and empowering dealers of registered vehicles and provide adequate safeguards against fraudulent activities in the transaction.  

The key provisions of the new rules are as follows: 

  • an authorization certificate for the dealers of registered vehicles has been introduced to identify the authenticity of a dealer. 
  • the procedure for intimation of delivery of vehicle between the registered owner and the dealer has been detailed. 
  • the powers and responsibilities of a dealer in possession of registered vehicles have also been clarified. 
  • dealers have been empowered to apply for renewal of registration certificate/ renewal of certificate of fitness, duplicate registration certificate, NOC, transfer of ownership, of motor vehicles in their possession. 
  • maintenance of an electronic vehicle trip register has been mandated which would contain details of the trip undertaken viz. trip purpose, driver, time, mileage etc. 

These rules recognize and empower dealers of registered vehicles and provide adequate safeguards against fraudulent activities in the selling or purchasing of such vehicles, thus promote ease of doing business and transparency in the sale and purchase of registered vehicles through dealers.  

The pre-owned car market in India is fast growing especially online marketplaces. The new rules will help in building a comprehensive regulatory ecosystem for the pre-owned car market.

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