Steps Involved In Car Ownership Transfer

In India, the used car market is undergoing a definitive boom. Apart from the price tag being lower than brand new cars, used cars also have an upper hand with respect to value for money. Product quality in the pre-owned car market is better than ever before. So a good find can save you lots of money in the long run as well.

The rate of depreciation in cars is the fastest during the first 5 years of ownership. So, another advantage of opting for a second-hand car is the fact that the depreciation that these cars undergo will be at a slower pace. The used car market these days have a wide variety of models and variants to showcase, so you will never be deprived of the luxury of choice. But the icing on the cake is the fact that most banks offer used car loans at irresistible interest rates. The premium for used car insurance is also quite reasonable.

Many car owners have trouble understanding the process of used car ownership transfer. They tend to outsource the work to be done at the Regional Transport Office (RTO) to car ownership transfer agents who charge a huge amount for their involvement in the case. However, with a little bit of research and understanding, car ownership can easily be transferred between the seller and the buyer without the involvement of a third party. Here is a rundown on how to transfer the ownership of a car.

Transfer Of Ownership Of Vehicle Within State - Step-By-Step Guide:

Car Ownership Transfer

The steps involved in the car ownership transfer process within state is as detailed below:

  1. Sale agreement from a notary
  2. The transaction between the buyer and the seller will have to be recorded in a sale agreement from a notary. Payment details (whether it is through demand draft (DD) or cheque) will also have to be mentioned. The condition of the vehicle, the status of the RC and its hand over, and details of insurance will also be recorded here. The sale agreement defines the payment made for the vehicle ownership transfer and the ownership status from the time the keys are handed over to the buyer.

    Once the seller receives the payment, he/she should sign two copies of Form 29 and a copy of Form 30 that will be submitted by the buyer to the Regional Transport Office (RTO). These forms will indicate the seller’s consent on transfer of ownership.

    If the car is under a loan, then Form 35 will have to be signed along with a No Objection Certificate from the lending bank. The seller should also hand over the following documents to the buyer, apart from the keys of the vehicle:

    • Original registration certificate (RC)
    • Valid insurance
    • Request letter for clearance certificate (CC)
    • Copy of PUC certificate
    • RTO tax-related documents
    • Copy of the delivery note
    • The vehicle owner’s manual
    • Warranty papers
    • History of servicing
    • A copy of the car’s original invoice

    The seller should remember to keep a copy of the following documents for future reference:

    • The sale agreement
    • Address proof of the buyer and his/her ID
    • DD copy or cheque
    • Insurance and RC
    • Form 29
    • Form 28, if relevant
    • Form 30
    • RTO tax papers of the car

    The original invoice of the car should be retained by the seller.

    Points to note for the seller:

    • The seller should wait for the demand draft or cheque to be cleared before he/she hands over the vehicle and the documents to the buyer.
    • All fields in the delivery note and the forms issued by the RTO should either be updated with the correct information or “N.A.” if not applicable. No fields should be left blank on the forms.
    • The forms should also have the signatures of the seller and the buyer. It would be ideal for both parties to visit the RTO for the transfer process. In case this is not possible, all relevant documents should be handed over to the buyer.
    • After the car is sold, inform the insurance company of the transfer. This is particularly relevant if the insurance of the vehicle is being transferred as well.
    • Remember to request the buyer to send you a copy of the updated RC.
  3. Buyer to apply for clearance certificate (CC) from the old Regional Transport Office
  4. If the car is not under a loan, the following documents need to be produced at the RTO:

    • Request letter for the clearance certificate
    • Original registration certificate (RC)
    • A copy of the insurance of the vehicle that is valid
    • A copy of the emission certificate
    • A self-addressed envelope with stamps worth Rs.30 affixed.

    The buyer should get the aforementioned documents verified by the clerk at the RTO and get it attested by the office superintendent. Then he/she should submit the documents and get an acknowledgement form from the RTO. The CC application process does not involve any fees. After the application is submitted, the CC and the modified RC book will be mailed to the residential address of the buyer within 30 days.

    If the car is financed through a loan, this step will also include a hypothecation cancellation process.

  5. Buyer to apply for ownership transfer at the new Regional Transport Office
  6. Provided that the vehicle is not under a loan, the following documents will have to be furnished at the new RTO:

    • 2 copies of Form 29, the notice of the ownership transfer
    • Form 30, the report of the ownership transfer
    • Original registration certificate
    • Copy of the valid car insurance
    • Copy of the emission certificate
    • Copy of the address proof of the buyer
    • Copy of the buyer’s PAN card
    • Original CC
    • 1 passport sized photograph of the buyer
    • Self-addressed envelope affixed with stamps worth Rs.30

    These documents should be verified by the superintendent at the RTO. The buyer may also have to sign additional documents, as requested by the superintendent.

    Car ownership transfer cost - The transferee will have to pay the required fees for ownership transfer. Please note that there will be a late fee charged if the ownership transfer application is not submitted within 14 days of sale of the vehicle.

    Once the fee is paid, two challans will be provided to the buyer. He/she should attach both the challans with the documents and submit them to the clerk at the RTO. An acknowledgement will be provided by the clerk and the RC book will be mailed to the buyer within 30 days.

    There may be additional steps involved in the above process and Forms 32 and 35 will need to be furnished if the car was under a loan.

Points to note for the buyer:

  1. The registration number code of the vehicle will not accurately represent the original RTO. You should look at the back of the RC in the lower right corner where the RTO will be mentioned.
  2. It is possible to register new vehicles in any RTO. However, for ownership transfers, the process is slightly different. The transfer of ownership application should be submitted to the RTO pertaining to the residential area of the buyer.
  3. Form 28, i.e., No Objection Certificate (NOC), is not required when the transfer of ownership is within the state. Instead, the CC from the seller is required. 3 originals of Form 28 is required when the ownership transfer is between states.
  4. RTOs may be closed on the second Saturday of every month.
  5. The cash counters at RTOs may close at noon on Saturdays.
  6. It is important to take copies of all documents and carry the originals as well. Arranging the documents as needed will help in saving a lot of time.
  7. You may carry some stationary such as pens, whitener, glue, stapler, etc. for last minute updates/corrections.

Car ownership transfer can be a hassle-free process if you follow the necessary steps. Irrespective of whether you are the buyer or the seller, you should ensure that you have copies of the relevant documents for future reference.

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