Selling a Car: Transfer of Ownership

[druva]

Can someone put out an advice on How to Sell cars!
NOTE to mods: if needed, please move to appropriate thread.

Saw this article on Hindu, March 15, 2008

Dangers of carrying invalid vehicle papers Law and order Invalid RC book and insurance papers cause problems and L. Srikrishna writes about how they do.

In recent weeks, the traffic and crime police have discovered that during intense vehicle checks, RC books and insurance papers were either invalid or the owners had not effected a transfer of the vehicle to their names.
Senior officers investigating traffic and crime-related offences said people who purchased used vehicles have not transferred the vehicle in their names. As a result, the ex-owners find themselves in trouble.
For traffic violations such as jumping signals, lane-jumping, over-speeding, the police send notices to the addresses of the vehicle owners as in the records, directing them to pay fines. On receipt of the notice, the owners rush to the police to inform that they had sold their vehicles long ago. However, the police officers said that the persons figuring in the RTO registers would be legally liable to pay the fines/compensation/imprisonment, depending on the nature of offence.
A case in point is that of a software professional in Adyar who sold his car nine months ago through a car broker. Last week, he received a police notice directing him to pay a fine for signal jumping violation. Shocked, the IT professional went to the police station to inform that he had sold the vehicle long ago, but he was informed that since the name change was not effected, he had received the notice .
In another case, 10 days ago when a 30-year-old-man was proceeding towards Madambakkam on his two-wheeler at around 11 p.m., he was hit from behind by a speeding water tanker. It was a case of hit-and-run and the motorist died in a nearby private hospital. Members of the police noticed the registration number of the tanker lorry and informed the police.
Investigations revealed that the vehicle owner, as per the records, resided at Vellore. A team rushed there, but found that the person had already sold the vehicle four years ago through a car broker in Chennai. The police are in the process of tracing the lorry and are yet to file an FIR in this connection. It is another story that the legal heirs of the victim are not sure as to how to get compensation from the insurance company. <<My own NOTE: In this case, ex-owner is still liable >>
Additional Commissioner of Police (Traffic) Sunil Kumar said that while selling/buying vehicles in second hand markets, public should ensure that the name transfer procedures were carried out as per the law.

[khan_sultan]

Interesting. How can you, as a seller, ensure that the buyer has transferred the vehicle in their name? Is there something that the buyer can do to avoid such situations?

[druva]

If I remember correctly, in US - the seller has to inform the DMV. I dont know whether such a provision is there in our RTOs.

[khan_sultan]

So who's responsibility is it in India for this? the seller or the buyers?

[Technocrat]

See a Seller would get into trouble if the vehicle is sold & meets an accident, on the other hand the buyer might face trouble if the seller has proper sale papers.
So depends on the cop who do the feel worthy of milking

On a serious note it should be the seller as he stand more risk.

[DirtyDan]

Originally Posted by druva

If I remember correctly, in US - the seller has to inform the DMV. I dont know whether such a provision is there in our RTOs.

Yes. Also, upon sale the owner takes his registration plates off the vehicle, the new owner puts his plates on. This solves a lot of these problems along with modern computer systems.

[condor]

druva : If I remember correctly, in US - the seller has to inform the DMV. I dont know whether such a provision is there in our RTOs.

That's because licence plates are issued to a person, but for a vehicle registered to the person (licence holder). The plates then become the responsibility of the person/licence holder.

In India, the licence (registration) is for the vehicle, and has to remain on the vehicle.

Note the difference here - In USA, you can have the same plates for ever - but on only one vehicle at a time. Like, today if you have a car with a particular number, and you sell the car, you can use the same licence (& plate) for your next car. That particular licence can not be used by the buyer.

To avoid instances like those mentioned in the first post here, one needs to be careful to not sign on the transfer papers unless the buyer's name is filled in.

[rkbharat]

By Not handing over the vehicle till the name is transferred. While selling keep this clause very clear to buyer that you will handover the car only after transfer is done.

Originally Posted by khan_sultan

Interesting. How can you, as a seller, ensure that the buyer has transferred the vehicle in their name? Is there something that the buyer can do to avoid such situations?

[dadu]

Thats not a commercially viable solution, as a buyer you should get a copy of all the transfer/sale deeds and then post it using Regd post with A.D to the RTo concerned.

You have informed the RTO of the sale, thats the max you can do.

Originally Posted by rkbharat

By Not handing over the vehicle till the name is transferred. While selling keep this clause very clear to buyer that you will handover the car only after transfer is done.

[druva]

Originally Posted by rkbharat

By Not handing over the vehicle till the name is transferred. While selling keep this clause very clear to buyer that you will handover the car only after transfer is done.

Originally Posted by condor

To avoid instances like those mentioned in the first post here, one needs to be careful to not sign on the transfer papers unless the buyer's name is filled in.

What to do, if I go for dealer exchange? or even if give the car to a second hand car dealer? I thought when I exchange cars, I just handover to the dealer get my new car and come! Should I do something more?

[hydrashok]

Originally Posted by khan_sultan

Interesting. How can you, as a seller, ensure that the buyer has transferred the vehicle in their name? Is there something that the buyer can do to avoid such situations?

Every time I've sold a vehicle, I have filled up all the forms in duplicate and got the buyer's signature on all forms. I also collect:

a) A receipt from the buyer for all the papers I've handed over to him,
b) A receipt from the buyer for the vehicle and the duplicate keys, and
c) A written undertaking from the buyer that he/she will send the papers to the RTO for registration within 14 days of the sale of the vehicle, and that he/she will be responsible for all matters (legal and otherwise) arising from the vehicle from the date of sale onwards.

After all this, I send the full set of papers (one of the as-good-as-original copies with me) to the RTO the very next day after the sale by Regd. Post Ack. Due. I file the receipt from the PO and the Ack. card when I receive it back from the PO.

This much is good enough to show that I have taken all effort to get the vehicle registration changed to the buyer's name. And so far (5 vehicles so far) it has worked like a charm.

However this works only when you sell the vehicle directly to somebody (through a broker or through direct contct). This does not work when you sign the sale-papers and "sell" the vehicle to a used-car/2-wheeler showroom/broker.

[rkbharat]

Originally Posted by dadu

Thats not a commercially viable solution, as a buyer you should get a copy of all the transfer/sale deeds and then post it using Regd post with A.D to the RTo concerned.
You have informed the RTO of the sale, thats the max you can do.

Informing RTO of the sale will not work, if its in your name, its yours and you will get all the fines and liabilities.

This is bit painful, but one of my friend sold his Indica and accompanied the buyer to the RTO office to fill the name transfer form and submission. He handed over the car only after now RC was issues in 10 days. Till that time car was grounded.

Also while selling, both signed a kind of legal document for confirming the sale.

I will not mind doing all that, instead of getting a news that my car have hit people, which I sold 1 yr back.

Originally Posted by druva

What to do, if I go for dealer exchange? or even if give the car to a second hand car dealer? I thought when I exchange cars, I just handover to the dealer get my new car and come! Should I do something more?

No idea how this works with dealers, but I am sure if you give them this instruction, they will surely oblige. And they can surely fasten the process of change the ownership

[deetee]

In the sale papers , usually sellers leave the 'date field' blank. If this is filled in all the forms, then the buyer must register the vehicle within 14 days or else he has to pay fine for the delay. That will encourage certain buyers to hasten up for registration. Of course this will not work with exchanges and 2nd hand dealers.
Additionally as hydroshok said, following up the sale to its end is the best . Afterall , we are not selling cars for income like dealers right? So, that much effort to see that the car we loved falls into safe hands is completely justified.

[ajmat]

Best way is not to sign the insurance transfer note until the seller comes back with proof of transfer

[condor]

ajmat : Best way is not to sign the insurance transfer note until the seller comes back with proof of transfer

Isn't it possible for the buyer to take separate insurance ?