The used car market is one of the fastest growing segments globally, and thanks to mismatch in supply and demand of new vehicles, it has been accelerating at a faster pace.
Even with rough estimates the used car market in India is said to 1.5 to 2x of the new vehicle sales. But a large portion of the transactions are still happening in the unorganised sector. The Ministry of Road Transport & Highways (MoRTH) aims to further give impetus to the organised segment, by promoting ease of doing business and transparency in the sale and purchase of registered vehicles through dealers.
The ministry issued a draft notification G.S.R 693(E) on 12 September 2022 proposing amendment in Chapter III of Central Motor Vehicle Rules, 1989 to build a comprehensive regulatory ecosystem for the pre-owned market.
In recent years, the advent of online marketplaces, which are involved in buying and selling of pre-owned vehicles has further given a boost to the pre-owned vehicle segment. But in the current ecosystem, many issues were being faced viz. during transfer of vehicle to subsequent transferee, disputes in regard to third party damage liabilities and difficulty in determination of defaulter among others.
MoRTH has announced key provisions of the proposed rules, which state the following:
1. An authorisation certificate for the dealers of registered vehicles has been introduced to identify the authenticity of a dealer.
2. Furthermore, the procedure for intimation of delivery of vehicle between the registered owner and the dealer has been detailed.
3. The powers and responsibilities of a dealer in possession of registered vehicles have also been clarified.
4. 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.
5. As a regulatory measure, maintenance of an electronic vehicle trip register has been mandated which would contain details of the trip undertaken viz. trip purpose, driver, time and mileage among others.
MoRTH says these rules are expected to aid in recognising and empowering intermediaries / dealers of registered vehicles as well as provide adequate safeguards against fraudulent activities to the selling or purchasing of such vehicles.