Ministry proposes that used car dealers be deemed owners

The Union 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 suggests 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. 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 then makes the dealer a registered owner. Once in his 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 for 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, his  authorisation certificate may get suspended or cancelled altogether.

After the authorisation certificate has been issued to a dealer, he 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, should help instil confidence in both buyers and sellers of used cars. Many have faced a slew of issues such as delayed transfer of ownership, forged or incomplete documentation and wrongly-issued challans.