Transport Ministry tightens norms for vehicle resale market

To prevent fraudulent activities around the sale and purchase of used vehicles, Union Road Transport Ministry issued a draft notification proposing new guidelines and regulations for the vehicle resale market.

The Ministry in a draft notification has proposed amendments in chapter III of Central Motor Vehicle Rules, 1989 to build a comprehensive regulatory ecosystem for the pre-owned car market.

"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, difficulty in determination of defaulter etc.,” the ministry said, in the notification.

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As per the proposed draft notification, 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.

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, mileage, the Ministry said.

The pre-owned car market in India has been gradually gaining ground. 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 this market.

However, this increase in online car reselling has made consumers vulnerable to fraudulent intermediaries.

Intermediaries will now have to inform authorities about each registered vehicle that will be taken up for resale, with part-onus of disclosure and compliance also on the original owner of the vehicle.

These rules are expected to aid in recognising and empowering intermediaries or dealers of registered vehicles as well as provide adequate safeguards against fraudulent activities in the sale or purchase of such vehicles, Ministry said.