Chase India, Consumer VOICE seek amendments in MV Act, regulations on pre-owned car industry

Leading public policy research and advisory firm Chase India and consumer-centric, voluntary organisation Consumer VOICE have sought amendments to the existing Motor Vehicles Act such as clear definition of 'motor vehicle intermediaries' (MVI) and regulations on the fast-growing pre-owned car industry in a recent report. The report has laid down five changes that need to be made in the existing Motor Vehicles Act so that consumers remain protected and the sector realises its growth potential.

The pre-owned car industry has both online and offline players -- online platforms, garages and physical offices who act as intermediaries in transaction between the buyer and the seller. These intermediaries are mostly unorganised. As per this report, legal definition of Motor Vehicle Intermediary by adding temporary registration provision will inspire a positive change among stakeholders.

The report states that the MV Act should be amended to define MVI as “a dealer or trader who facilitates transactions between a buyer and a seller in context to the sale and purchase of a preowned/registered motor vehicle”. Defining Motor Vehicle Intermediary can lead to accountability of unsold vehicles in case the vehicle is involved in any unlawful activity. This can also make the pre-owned car industry more organised, contributing towards job creation, FDI, consumer empowerment and tax generation in the sector.

The current Motor Vehicles Act needs to be amended as it has failed to keep up with the changing market dynamics particularly the role of intermediaries. This, in turn, renders the consumers vulnerable till the time vehicle registration is transferred in the ultimate owner’s name, as per the report.

In order to serve consumers’ interest, amendments should be made to Section 50 of the MV Act to ensure intermediaries, buyers and sellers are required to ensure registration transfer within a set time frame. It should also comprise for a penalty if registration is not transferred by the intermediary and the buyer. Besides this, Section 39 of the Act also needs to be amended to prohibit driving a pre-owned vehicle which has been temporarily registered.   The Act should also recognise the difference between transactions involving pre-owned vehicles and new vehicles, identify the different actors involved, require their registration and protect consumer interests. “Consumers would be the biggest beneficiaries in case Motor Vehicle Intermediaries comes under the ambit of law. This would ensure consumer empowerment as they would not be held accountable in case of misuse of their vehicles by intermediaries. Therefore, the MVI classification would provide clarity and ensure better consumer support,” Ashim Sanyal, Chief Operating Officer, Consumer VOICE said.