User Sign Up   |   Welcome Guest  |  Login  
Home » Articles


Everything you want to know about cars at a glance. Articles that cover what is hot and what is not! Read exciting happening in the Indian and Global Car industry, tips to help you and more...

Rate This Page

Transfer of Used Car Ownership

The used cars market is a booming business in India and as active as the new cars market. The procedure to buy a used car using online guides such as used car buying tips makes looking for a used car quite simple. The purchase of a used car requires a transfer of ownership, which requires several documents. Ensuring the availability and authenticity of required ownership documents and cross-checking document details can save a lot of time and money at a later stage.

After you complete the purchase of a used car, the previous owner has to inform the RTO, where the car is registered, of the change. If you fall under a different RTO jurisdiction, then both (the original and the new) RTO offices need to be informed. For people purchasing used cars across states, it is important to attain a “No Objection Certificate” (NOC) from the original RTO and send this to the new RTO across the state. For example, to legally transfer ownership of a car used in Delhi and then sold to a person staying in Bangalore, the seller must get an NOC from the Delhi RTO office and then send this to the Bangalore RTO office.

This NOC must also be accompanied by authenticated copies of the registration and insurance certificate along with proof of payment of all taxes. You, as the new owner, must inform the concerned RTO office within 30 days and produce the certificate of registration on which the ownership name needs to be endorsed. You should have your proof of address document, valid insurance papers, proof of tax payments made till required date, and any NOC document that the RTO requests. The car has to be physically presented at the RTO office during transfer of registration.

Check List of Transfer of Ownership Documents for Used Cars.

bullet Cross-check the registration papers of the car

A car registration signifies the area of use of the car. Ensure that the car owner or used car dealer provides you with the original registration paper of the car. The car registration book states that the car cannot be used beyond the boundaries of the mentioned state in India, unless the registration is transferred as well. For example, if the car was registered in Delhi, then it cannot be used in Bangalore until it is re-registered again for Bangalore. Entry tax is usually high on newer cars that are transferred within 18 months from the date of purchase. Transferring car ownership is a tedious government procedure and may be costly mainly due to the entry tax. However, if the used car belongs to the same state as that where you will be using it, then this entire process can be avoided as long as the original registration paper is in order.

bullet Ensure the complete RTO tax payment is made

The transport department in each state provides a receipt against RTO tax payment. It is a once in a lifetime tax payment and is paid by the first owner of the car. This is a government law that must be followed in any state. If this tax has not been paid, it could add up to double-digit figures in thousands (depending on the car model) that you, as the buyer, will have to pay. Before taking possession of the car or making any payments towards the purchase of the used car, ensure that the RTO tax is paid in full and that the tax receipt is in good condition. If the tax receipt is missing or misplaced, ask the owner or dealer for the receipt number and apply for a duplicate copy. It is strongly advised that you do not purchase a used car without its RTO tax payment receipt.

bullet Check the Road Tax Payment validity

The Road Tax is a small amount that is paid by every car owner on a periodic basis. Since this is a small amount, it is ignored by most car owners. However, irregular payments on the owner’s part can lead to unnecessary hassles for you later. Therefore, check and confirm that the car seller has paid the road tax and has cleared all outstanding payments before the car is transferred to your name.

bullet Validate the Insurance Payments applicable

The insurance policy is a vital document for any car. Legally no car is allowed to ply on roads without insurance. Transfer of ownership of cars will not be approved by any RTO in the absence of valid insurance papers and receipts of payment. Since insurance payments are periodic, check the due date. If the due date is during your transaction period, then ensure that the seller makes the payment. Transfer the car insurance papers to your name along with the car registration papers.

bullet Ask for the original car invoice document

The original invoice document of the car consists of complete details about the car like delivery dealer name, date of delivery, car finance details, engine number, and chassis number. This allows you to identify stolen or fake car parts if the invoice details do not match the actual car parts.

bullet Check for finance clearance

The invoice document also reveals if there were any finances, such as car loans, taken during purchase of the car. If so, then ensure that these finances have been already cleared by the seller and ask to see the original copy of the NOC from the finance company. The NOC must emphasize that the finance company no longer has any claims over the car. Make a photocopy of this NOC from the seller for good measure.

» Read more Articles On Used Cars