Some studies estimate that 3.5 million used automobiles were sold in India in FY21; that number is projected to rise to 7 million by 2026.

The sale of the vehicle will be carried out in accordance with the new regulations through a dealer; the previous owner and the new purchaser will not be connected in any way. The new owner’s information in the state transport office must be updated by the dealer. 

According to proposed regulations released by the Union road ministry on Thursday, used car dealers must get an authorization certificate from the relevant state transport authority and transfer vehicle ownership to their names in order to conduct business.

According to the ministry, the Central Motor Vehicle Rules, 1989 revisions aim to increase transparency and provide a thorough regulatory environment for the used automobile industry. 

The sale of the vehicle will be carried out in accordance with the new regulations through a dealer; the previous owner and the new purchaser will not be connected in any way. The new owner’s information in the state transport office must be updated by the dealer.

“The used car market in India has grown significantly over the past few years with the advent of players like us,” said Kunal Mundra, chief executive officer-India, of Cars24, a pre-owned vehicles marketplace. “It still has huge headroom for growth, and the regulatory support is absolutely critical for achieving this. These proposed changes are definitely a step in the right direction, and if they are accompanied by digitization of RTOs as well as a unified pan-India road tax structure, then we will truly have the right regulatory platform to drive greater car ownership in India,” Mundra said

The draught rules define the steps involved in transferring ownership of the car from the registered owner to the dealer and spell out the dealer’s authority and duties. The new regulations will provide dealers the authority to request the renewal of registration, fitness, duplication, and no-objection certifications for ownership transfers. Dealers will also be required to keep an electronic vehicle travel log with information on the trips made, including the destination, driver, time, and mileage.

“Taking the liability off the owner once they have sold their car is a step in the right direction. Making the dealer accountable will help with the expedited transfer to buyer’s name, which is currently not taken seriously,” said Banwari Lal Sharma, CEO-consumer business, CarTrade Tech Ltd

These rules are expected to aid in recognizing and empowering intermediaries/dealers of registered vehicles as well as provide adequate safeguards against fraudulent activities to the selling or purchasing of such vehicles,” a road ministry statement said.