MoRTH to begin the process of authorising used vehicle dealers

04 Apr 2023 CW Team

The pre-owned car and two-wheeler dealer fraternity has welcomed the Ministry's recent guidelines, which are intended to ensure transparency in the used vehicle sale-and-purchase business, which is still a highly fragmented and largely unorganised sector in India. They also see this as a recognition of the numerous small- and medium-sized used vehicle dealers operating in India.

The new regulations not only require a used car dealer to obtain an authorisation certificate in order to legally conduct business, but they also hold the dealer legally responsible for a specific vehicle as its "deemed owner" while it is in their possession.

With the introduction of Form 29C, which must be jointly signed by the seller and dealer and placed on the government's portal at the time the vehicle is handed over to the dealer, the new regime will get updated documentation.

What is the new mandate?
Given that the seller is not in possession of the car, the dealer, who is now considered the owner of the subject vehicle, will be responsible for both the vehicle's proper use and any misuse that may occur. If the two sign and submit Form 29C on the Vahan portal together, the seller will be released, according to Kamal Kishore Avutapalli, General Counsel for Cars24.

The rules also mandate that the dealer keep an electronic trip log of the vehicle online on the Vahan portal to prevent it from being used for test drives by prospective customers or while it is being transported for repair or refurbishment. "This is a major comfort for someone selling their car, especially to a small dealer who, unlike larger companies like Cars24, would often not give any seller protection against any issues.

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The process of implementing the new regulations will begin on April 1 thanks to an online sub-portal on Vahan, according to the Ministry of Road Transport and Highways (MoRTH), which had already executed an amendment to the Central Motor Vehicle Rules (CMVR) in December 2022 to regularise used vehicle dealers in the market by requiring them to obtain an authorisation certificate from the respective RTOs whose jurisdiction their business lies. The pre-owned car and two-wheeler dealer fraternity has welcomed the Ministry's recent guidelines, which are intended to ensure transparency in the used vehicle sale-and-purchase business, which is still a highly fragmented and largely unorganised sector in India. They also see this as a recognition of the numerous small- and medium-sized used vehicle dealers operating in India. The new regulations not only require a used car dealer to obtain an authorisation certificate in order to legally conduct business, but they also hold the dealer legally responsible for a specific vehicle as its deemed owner while it is in their possession. With the introduction of Form 29C, which must be jointly signed by the seller and dealer and placed on the government's portal at the time the vehicle is handed over to the dealer, the new regime will get updated documentation. What is the new mandate? Given that the seller is not in possession of the car, the dealer, who is now considered the owner of the subject vehicle, will be responsible for both the vehicle's proper use and any misuse that may occur. If the two sign and submit Form 29C on the Vahan portal together, the seller will be released, according to Kamal Kishore Avutapalli, General Counsel for Cars24. The rules also mandate that the dealer keep an electronic trip log of the vehicle online on the Vahan portal to prevent it from being used for test drives by prospective customers or while it is being transported for repair or refurbishment. This is a major comfort for someone selling their car, especially to a small dealer who, unlike larger companies like Cars24, would often not give any seller protection against any issues. Also read: Cube Highways raises Rs 4,500 cr for first InvIT 87 structures demolished by BMC for Goregaon-Mulund link road