Red Fort blast puts spotlight on RC transfer delays: Used car market has outgrown regulation, say dealers

The investigation into the recent Delhi blast, where authorities struggled to trace the latest owner of a used vehicle has reignited long-standing concerns over India’s inconsistent and slow Registration Certificate (RC) transfer system. Used-car dealers across the country say the incident has exposed gaps they have been grappling with for years, including delays in ownership updates, uneven state-level processes, and low adoption of regulations meant to streamline the sector.

Despite the Centre’s push to digitise and formalise vehicle transactions through the VAHAN system, dealers report that ownership changes often take months to reflect, especially in inter-state transfers. This leaves sellers legally responsible for challans, accidents or misuse involving vehicles they no longer own.

Slow Adoption of ‘Deemed Ownership’ Framework

To address such vulnerabilities, the Ministry of Road Transport & Highways (MoRTH) introduced the Authorised Dealer of Registered Vehicles (ADRV) framework in 2023. ADRVs, once registered with state RTOs become the “deemed owner” of a used vehicle from the moment the seller hands it over, transferring liability from individuals to dealers until the RC transfer is complete.

However, implementation across states remains uneven. VAHAN data shows fewer than 1,500 used-car dealers have been registered as ADRVs, a small number compared to the estimated 30,000-40,000 dealers operating nationwide. Many states are yet to fully roll out the process, creating confusion and limited adoption.

Industry Response: Streamline and Standardise

Organised players say the underlying issue is structural. Companies like CARS24, which handle large volumes of transactions, manage RC transfers directly with RTOs. The company has introduced seller-protection policies to cover liabilities during the gap between handover and final transfer, but stresses that private safeguards cannot replace systemic reform.

“India’s used-car market has grown rapidly, but regulation and state-level digitisation haven’t kept pace,” a CARS24 spokesperson told Business Today. “The deemed-ownership model is a step in the right direction, but it must be uniformly implemented for it to truly protect sellers.”

Used-car dealers, including organised players like CARS24, are urging the government to mandate time-bound RC transfer deadlines of 30–45 days, ensure uniform adoption of the ADRV (Authorised Dealer of Registered Vehicles) framework across all states, enable real-time digital recording of vehicle handovers, and create a single national dashboard connecting RTOs, police and authorised dealers to eliminate ownership ambiguities.