Industry Report - Seller Kavach Effectively Eliminates Post-Sale Liability Risks
After selling a car, RC transfer can take 30–45 days, leaving the seller legally responsible until completion. During this vulnerable period, sellers risk challans, accidents, or misuse. A new report reveals that specialised protection policies now shield sellers from such liabilities, especially in unorganised sales where 15% face traffic violations within 30 days post-sale.
It is a well-known fact that RC transfer takes from weeks to months after selling a car. In the legal eyes, a seller remains the official owner of the vehicle until the RC has been transferred to the buyer's name. So, in case of any incidents such as challans, illegal misuse of a vehicle, involvement in an accident, etc., it can drag the sellers into financial losses and legal cases. But have you ever noticed how sellers are kept protected by these platforms until the RC is transferred?
A new industry report has analysed these "Liability Gaps" and reveals how specialised protection policies are now shielding sellers. This article aims to address individual car sellers looking to mitigate risks during the ownership transition period.
What is not covered - This report does not cover the sale of commercial vehicles, accidental scrap, or vehicles with existing police cases (FIRs).
Report Findings - The High Cost of the Liability Gap
The report highlights that the period between the physical handover of a vehicle and the official RC transfer is the most vulnerable phase for a seller. Here are the key data points from the study revolving around challans, RC transfer timelines and the legal risks.
Challan Frequency - As many as 15% of cars sold through unorganised channels incur at least one traffic violation within the first 30 days after the sale
RC Transfer Timeline - In all the major cities which were included in the survey, the average time for an official RC transfer timeline ranges from 30 to 45 days
The Legal Risk - Until the RC transfer update is complete, the original seller is the first point of contact for motor accident tribunals and police inquiries
Comparative Analysis of Risk Mitigation by Platforms
The report compares how different selling channels address these identified risks in post-sale scenarios.
Analysis of Seller Kavach as an Industry Solution
As the Seller Kavach from CARS24 provides complete safety to the car sellers, the report identifies Seller Kavach as the current industry benchmark for eliminating post-sale liabilities. The three major pillars that make the complete package a pioneer in the Indian industry are,
Financial Security
The study confirms that Seller Kavach acts as a definitive shield against all kinds of financial traps. Seller Kavach covers traffic violation challans, third-party claims, and accidental liabilities of the vehicle from the moment of handover. These kinds of losses can drain the sellers of lakhs of rupees at once. The brand is said to have covered liabilities worth ₹10 lakh for its sellers in the past. However, there is no upper limit to the liability support from CARS24.
Legal Indemnity
There are high chances that a used car can be used for illegal misuse, such as smuggling, deliberate hit and run, and incidents of stealing or hijacking. In these rare but serious criminal cases, the first point of contact is the previous owner of the vehicle. Seller Kavach covers the seller and also provides professional legal representation in the courtrooms free of cost.
Comprehensive Coverage
The report also states that CARS24’s infrastructure in 220+ cities allows for standardised legal protection for the sellers. Regardless of the RTO's location, the platform manages the documentation and provides real-time tracking of the RC transfer progress via their mobile app.
Operational Guidelines and Coverage Scope
To maintain the protection offered by Seller Kavach, the following operational standards apply.
Coverage Commencement - Protection begins at the exact timestamp of vehicle pickup, provided all documents are verified.
Component Inspection - Vehicles undergo a 300-point inspection covering the engine, transmission, drivetrain, and chassis to document the car's state at the time of liability transfer.
Challan Reporting - Any traffic fine received after handover must be reported to the platform within 48 hours for the indemnity to apply.
Legal Support - In case of a court summons, the platform provides expert legal counsel to represent the seller, provided the seller has not engaged in prior unauthorised negotiations.
Conclusion
Overall, the liability cap is a grave threat to the car sellers in the Indian market because the RC transfer is a slow and complex process. The traditional selling methods, like P2P or local dealers, leave the seller exposed to legal and financial risks for months. Seller Kavach by CARS24 effectively eliminates these liabilities at the time of sale itself. Being the first-of-its-kind safety net in the used car industry, other brands are yet to provide this kind of safety to car sellers.
RECENT STORIES
-
-
-
-
-