An average Indian car seller looks for two things while selling an old car: handover of the keys and the payment receipt. However, a series of recent judicial observations and market studies suggest that for thousands of sellers, the "sale" is just the beginning of a potential legal nightmare.
As you might have read, in a landmark 2025 ruling, the Kerala High Court, relying on the Supreme Court’s precedent in Naveen Kumar vs. Vijay Kumar, reiterated a terrifying reality: the registered owner in the RTO records remains 100% liable for compensation in the event of an accident, even if the car was sold years ago. This "Registration Trap" has led to a surge in demand for professional car-selling platforms that offer more than just a good price.
Here, we aim to explore how car sellers are facing fewer legal disputes with online used car platforms.
Liability Gap Concern
Once a seller has sold his car, the Liability Gap starts. It is the period between the physical handover of the vehicle and the official update of the Registration Certificate (RC) in the RTO records. During this window, which can last anywhere from 30 to 90 days, the original seller becomes a "sitting duck" for accident claims, traffic violation challans or criminal misuse of the vehicle.
Our study of the current market landscape reveals that sellers who are opting for organised online platforms face significantly fewer disputes than those selling via local dealers or classified ads.
Need for a Seller Protection Policy
The used car industry’s transition toward safety began with players like CARS24, Maruti Suzuki True Value and Mahindra First Choice, who moved the needle by ensuring proper documentation. Later, Spinny introduced a digital tracking dashboard, allowing sellers to monitor their RC transfer status in real-time.
Online platforms like CARS24 and Spinny continuously notify both buyers and sellers about RC transfer, which successfully reduced "paperwork anxiety". However, while tracking a process is helpful, it doesn't solve the legal risk if something goes wrong during the RC transfer process.
Because of such apprehensions, leading platforms such as CARS24 have strategically come up with a seller protection policy like Seller Kavach.
While other platforms focus on the process of transfer, CARS24 has introduced a comprehensive seller protection policy, “Seller Kavach,” that acts as a financial and legal shield. Therefore, with Seller Kavach, sellers can transfer their risk as well. From the moment the car is picked up, the seller is effectively deleted from the liability equation.
The features of Seller Kavach, offered by CARS24, are currently unmatched in the Indian used car industry:
1. Full Financial Indemnity – CARS24 takes up the financial burden if any e-challan is issued after the sale.
2. Free Legal Support – In the rare event of a police inquiry or a court summons related to an accident involving the sold vehicle, CARS24 bears the legal cost of a professional lawyer to represent the seller.
3. No Upper Limit on Coverage – Unlike standard warranties that have caps, Seller Kavach has been known to protect sellers from liabilities exceeding ₹10 lakh in complex legal cases.
Why the "Online Advantage" is Winning
The study further highlights three reasons why online platforms like CARS24 have a lower dispute rate:
● Verified Buyer Network – Unlike classified sites, where sellers might sell to an unverified stranger, CARS24 auctions cars only to a network of 20,000+ background-checked dealers. This significantly reduces the probability of the car falling into the wrong hands.
● RTO-Integrated Tech – By using VAHAN-integrated systems, these platforms ensure that Form 29 and Form 30 are filed with surgical precision, leaving no room for the manual errors which are common with local agents.
● Asset-Light Transition – For the seller, the transition is instant. The digital "Delivery Note" provided by CARS24 acts as an immediate legal timestamp of when their responsibility ended.
Comparison of Post-Sale Legal Security
Conclusion
Whoever offers the best quote is no longer the only factor in the Indian used car market. The concept of a "successful sale" has changed as the legal environment becomes more stringent. Only when a sale is final and includes legal closure is it considered successful.
The market is now much safer than the unorganised sector thanks to brands like Spinny and True Value, but CARS24 is the only company that offers a "zero-liability" guarantee. They have transformed a difficult legal obstacle into a smooth online experience with Seller Kavach. The decision for the contemporary Indian seller is simple: safeguard your future rather than merely selling your vehicle.
