Why Cars24 Takes Legal Ownership of Cars Between Sale and Resale

Everything in this series so far has been building toward one decision. Not a product decision. A decision about who carries risk. Here is the question, as plainly as it goes, because the whole thing turns on it.

When a used car is sitting in the gap, sold by its old owner, not yet bought by its new one, parked in a yard waiting weeks for paperwork, somebody is legally responsible for it. If it is in an accident in that window, somebody is the defendant. If it gets a challan, somebody gets the bill. If it is misused, somebody gets the first knock on the door.

For most of India, the answer to "who" is the cruellest one available: still the person who sold it and walked away. That is the broken default this whole series has been about.

The deemed ownership framework offers a better answer: the party who has the car should carry the liability for the car. But that better answer has a cost, and the cost is the reason almost nobody has actually taken it on. Somebody has to volunteer to become the legal owner of cars they are only holding temporarily. That is a heavy thing to volunteer for. We volunteered.

 What legal liability does Cars24 carry as a deemed owner?

The easy version of this story leaves out the weight, and the weight is the whole point. So here is the weight.

The moment we mark a car as deemed-owned by Cars24, we are that car, legally. Not the seller. Not the buyer. Us.

Every traffic challan that car generates while it sits with us routes to Cars24. Every accident claim, and this is the heavy one, names Cars24. When a motor accident claims tribunal looks for the owner of record to hold responsible, it finds us. We become the defendant. Police queries about that vehicle come to us. The full legal weight that used to sit, unfairly, on a seller who had moved on now sits on us, deliberately, by our own choice.

It is not a small number of cars. We are talking about tens of thousands of vehicles a year on our books as our legal responsibility. Some of them sit there for a long time, cars that are structurally hard to transfer onward, where the liability stays with us, not for days but indefinitely. We stop being the platform that helps a transaction happen and become the party legally on the hook for the asset itself.

This is not a footnote to the deemed ownership story. It is the deemed ownership story. The reason most states have weak adoption and fewer than one dealer in twenty has registered is not only bureaucratic friction. It is that being the deemed owner is genuinely risky, and most rational actors look at that risk and decline it.

Why does Cars24 accept legal ownership of cars in transit?

So why accept all of that? There are two reasons, and the second is the one that actually decided it.

The first is the cold one. The alternative is worse, for everyone, including us. The status quo means roughly 175,000 cars a year flowing through a broken transfer process, a large share never completing the transfer at all, and sellers carrying indefinite liability for vehicles they no longer own. That is not a stable foundation for a business that wants to be the trusted place to sell a car. You cannot build lasting trust on a process that routinely betrays the people who use it. So removing that betrayal is, in the long run, simply good business. The commercial logic is real, and I will not pretend it away.

But the commercial logic is not what made the decision. This is the part that did.

We sell on a promise. The promise is that selling your car to us is clean, safe, and final; you hand over the keys, and you are done. For years, that promise carried an asterisk we did not like saying out loud: done, except for the liability that lingers on your name for an unpredictable stretch of time, which we will help with but cannot actually end. Every one of those 40% of support tickets was someone discovering the asterisk.

You cannot make a promise to a customer, watch the system make a liar out of you, and call that acceptable. At some point you either close the gap between what you promise and what you deliver, or you stop making the promise. We were not willing to stop making the promise. So we took the only path that closes the gap; we stepped into the liability ourselves.

That is the whole decision. We took on tens of thousands of cars' worth of legal exposure so that the person who sells us their car can actually be as done as we always told them they were. Not "covered." Not "protected, terms apply." Done.

The risk was never new to us

There is a third part of the answer, and it is the one that made the decision feel less like a leap than it looks from outside.

We did not start carrying this risk the day we registered as a deemed owner. We have carried it, morally and in our actions, for years. Seller Protection and Kavach were built on exactly this belief, that the RC failing to transfer is a structural failure of the system, and the seller should not be the one punished for it. When a car turned up in an investigation and the police traced the seller, we did not shrug and point at the record. We stood with the seller. We supported them, litigated alongside them, absorbed cost and effort so that a person who had done everything right would not face a process they did not deserve alone. The harassment in that process is real; that is how it works structurally in India, and we were in it with our sellers, case after case, year after year.

The courts have been clear about how heavy this exposure is. In Naveen Kumar v. Vijay Kumar (2018), the Supreme Court held that liability follows the name on the registration record; full stop, the same rule that has trapped sellers for years is the rule we are now stepping in front of, deliberately.

So when the government created a formal structure for this responsibility, we were not taking on a risk we had been avoiding. We were formalising one we had always treated as ours. The framework did not change what we believed or how we acted. It let us say in law what we had only been able to say in conduct. That is also the honest answer to anyone who asks what this does to our risk profile: the exposure is not new. What is new is that we can finally carry it cleanly, with a legal structure built for it, instead of informally, case by case, after the damage was already in motion.

The discipline this demands of us

Taking this on is not a one-time act of courage. It is a permanent operating obligation, and it is not fully solved.

Being the legal owner of tens of thousands of cars means building muscle we did not need as a pure marketplace. Stronger legal capability to handle the claims that will inevitably come. Real rigour on compliance, the records, the registers, the obligations of a deemed owner, which are not optional and which we have to meet properly rather than partially. Becoming the owner of record for these cars gave us a duty of care we now have to keep earning, every day, on every vehicle.

If we let that slide, sloppy compliance, under-built legal muscle, the liability treated as a marketing line rather than a real obligation, we will have taken on all of the risk and delivered none of the integrity. That would be the worst of both worlds, and it is on us to make sure it does not happen. The bar we set by taking this on is a bar we now have to clear continuously. There is no off switch on that.

 Can other used-car platforms offer the same seller protection as Cars24?

People sometimes ask what stops a competitor from offering the same clean transfer. The answer is in everything above, and in one structural fact underneath it.

Start with the structural fact. To become the deemed owner of a car, you have to actually take the car onto your own books. The framework is built around a dealer who buys and holds inventory. A platform that only introduces a buyer to a seller and steps away never owns the car, so it can never become the deemed owner, and it can never end the seller's liability, not because it lacks the will, but because it lacks the position. A connect-and-step-away model is structurally locked out of this. Only a model that takes the car onto its own books can carry the liability at all. That is not a marketing claim. It is just how the framework works.

Then add the will, on top of the structural eligibility. Even among players who do take cars onto their books, this asks for something most will decline: the willingness to hold tens of thousands of cars' worth of legal liability, build the legal and compliance muscle to carry it, and accept being the named defendant in accident claims for vehicles you are holding in transit. That is not a feature anyone can switch on. It is a decision about how much risk you will absorb on behalf of your customers, and most companies, looking honestly at that risk, choose not to.

So the moat has two layers. A whole category of competitor cannot do this, because they never hold the car. And among those who can, most will not, because the liability is too heavy. The moat is not the technology. The moat is the liability, and the willingness to carry it.

The line I will stand behind

There is a gap in every used-car sale in India where the car belongs to no one and the risk belongs to the seller who least deserves it. The law wrote a way to fix it: let the party holding the car hold the liability, but the fix is heavy enough that almost no one took it on. We took it on. Not because it is easy, and not only because it is good business, but because we made our sellers a promise of a clean break and we were not willing to keep letting the system turn that promise into a lie.

The moment we mark a car as ours, we are that car, legally. Every challan, every claim, every consequence. We signed up for that, on tens of thousands of cars a year, so the person who sold it to us never has to. That is not a feature we are advertising. It is a liability we chose to carry. And it is the most honest thing we have ever built.