Deemed ownership is moving forward. The last mile still needs work.

When you sell your car to an authorised dealer, you should have to hand it over only once.

You should receive a digital record of the handover. You should be able to see who holds the car. If the dealer later transfers it to another dealer, the system should tell you. And you should not be called back to an RTO carrying documents that the government already has.

That is what deemed ownership was meant to achieve.

India introduced the framework in 2022. It allows an authorised dealer to become responsible for a car while it is in the dealer’s possession, even though the final RC transfer to the next buyer has not yet happened.

This is an important protection for the seller. The seller’s name may still appear on the RC, but the government now has a way to record that the car has been handed to an authorised dealer.

The Ministry of Road Transport and Highways has now proposed changes to make this framework wider and more practical. The proposals were published through G.S.R. 649(E) in July 2026. They are draft rules, not law yet.

Cars24 submitted its response to the ministry on 21 August. We support the direction of the draft. We have also asked for changes based on what we have seen while trying to make deemed ownership work on the ground.

The difference between a good rule and a widely used rule will be decided in the last mile.

What would the proposed rules change for a car seller?

The draft fixes several problems that have limited deemed ownership.

An authorised dealer would need one registration for an entire state instead of separate registrations for different transport-office jurisdictions. GST registration would no longer be mandatory in every case. Vehicle details and documents could be taken directly from VAHAN instead of being entered or submitted again.

The draft also introduces Form 29CA for a car moving between two authorised dealers.

This matters because a used car does not always travel directly from the seller to its final buyer. A smaller dealer may buy the car first. It may then move to a larger dealer or another city before somebody buys it for personal use.

The government’s record should follow that journey.

Under the proposal, each dealer-to-dealer movement would be recorded electronically. The seller would be notified when the car moves. The system would permit no more than two such transfers before the car must be transferred to its next registered owner.

For a seller, this creates something that has been missing for years: visibility after the handover.

The proposal also places conditions on the car entering this route. The RC, insurance and PUC must be valid. Pending challans, taxes and certain legal cases must be cleared. A car under an active loan or hypothecation agreement would not qualify.

Those safeguards are reasonable. A cleaner ownership-transfer process cannot be built on unresolved paperwork.

Can a digital process still send the seller back to an RTO?

It can. That is one of the problems Cars24 has asked MoRTH to address.

A process is not completely digital merely because it begins on a portal. If a seller uploads the documents, completes the authentication and receives an application number, but is later called to an RTO with the same papers, the process still depends on a physical visit.

Cars24 has recommended that the final rules make faceless processing the normal route. Physical appearance should be required only in exceptional cases. If an appearance is necessary, the applicant should receive a clear reason and an appointment.

We have also asked for defined timelines within which the State Transport Authority or RTO should complete a transfer application.

These details may look procedural. They are not procedural to the person who has already sold the car.

For the seller, an unexpected visit can mean taking time away from work, locating old documents and travelling to an RTO months after the car has left. The seller may not even know which dealer currently holds the car.

A digital record should remove that uncertainty. It should not merely give the uncertainty an application number.

What happens if an authorised dealer cannot register?

Deemed ownership works only through an authorised dealer. If dealers cannot register, sellers cannot use the protection.

Today, the authorisation fee under the central rules is ₹25,000. The draft proposes that individual states should decide the fee applicable in their state.

Giving states that power is understandable. But it can create an awkward gap.

What does a dealer pay after the central fee is removed but before the state announces its own fee? If the system has no answer, a new dealer may be unable to complete the registration.

The law may technically be available while the actual application remains stuck.

Cars24 has proposed a simple transition. The existing ₹25,000 fee should continue to apply in a state until that state notifies a different fee. The central rules could also set a date by which every state must decide.

We have made a similar recommendation for fees charged when Forms 29C and 29CA are generated. States can decide the amount, but the charges should remain clear and reasonable. A different or uncertain fee at each step would discourage smaller dealers from entering the system.

This is not only a dealer issue. Every dealer who stays outside the framework represents sellers who will continue handing over cars without a government-recorded change in responsibility.

How should financed cars fit into deemed ownership?

The draft says a car under an active hire-purchase, lease or hypothecation agreement cannot be handed to an authorised dealer through this route.

The restriction protects the lender. A dealer should not be able to take control of a car while ignoring an existing bank’s rights.

But financing creates two different situations.

In the first, the old loan is still active. The lender’s consent and release process must be completed before the car can move cleanly.

In the second, the old loan has already been repaid, but the lender’s name still appears on the RC because the hypothecation termination has not been recorded. The owner may believe the loan chapter is over. The vehicle record says otherwise.

There is also a third transaction to consider. The previous loan may have been settled, but the next buyer wants a new loan to purchase the used car.

Cars24 has asked MoRTH to allow an authorised dealer to support the addition of the next buyer’s hypothecation as part of the eventual transfer. The dealer should not be allowed to bypass the previous lender. The system should first verify that the earlier lender’s rights have been addressed.

A framework that can see the lender, the loan status and the next buyer’s financing should be able to manage these steps in sequence.

The alternative is to keep a large part of the used-car market outside the cleaner ownership rail simply because the next buyer needs a loan.

Why did Cars24 ask for twelve months instead of six?

The draft proposes a six-month limit on how long a car can remain under deemed ownership. If the car has still not been sold after six months, registered ownership would automatically move to the last authorised dealer holding it.

I agree with the idea of a deadline.

Deemed ownership is supposed to cover a car while it is moving through the trade. It should not become a permanent parking place for cars that nobody transfers.

Cars24 has asked for the period to be twelve months instead of six.

Some cars take longer to sell because of their age, location, documentation or an unresolved lender record. If the deadline is too short, dealers may avoid generating Form 29C for those cars because they do not want an automatic transfer onto their own RC.

That would produce the opposite of what the reform is trying to achieve. The dealer would continue buying and selling cars, but the government would lose visibility of the handover.

Cars24 is an interested party here. A longer holding period would also make our own operations easier. That is why this recommendation should be tested with data. The policy question is whether a six-month deadline brings more cars into the formal system or pushes the difficult ones outside it.

The clock should remain. The period should be long enough for dealers to use the framework honestly, including for cars that take longer to sell.

Why publish what Cars24 submitted to MoRTH?

A company’s recommendation to the government should not be trusted merely because the company describes it as good policy.

Cars24 benefits from several of the changes we have recommended. Faceless processing would reduce our operating work. Clearer fees would make dealer registration easier. A twelve-month holding period would give us more time with slower-moving cars. The ability to add hypothecation would support financed transactions.

Those interests should be visible.

The submission should be published so that dealers, sellers, lenders and other participants can examine it. They should be able to agree with our reasoning or point out where our commercial interest has overtaken the consumer’s interest.

Public consultation works better when the industry shows its working.

MoRTH’s draft moves deemed ownership in the right direction. It recognises dealer-to-dealer movement, gives sellers more visibility and makes greater use of the government’s own vehicle records.

The final test is much simpler than the language of any rule.

After handing over the car, does the seller receive a timestamped government record and avoid an unexplained call back to an RTO?

If not, the ownership-transfer process still has work to do.