Ease of Vehicle Ownership Index: State-wise Rankings and Used Vehicle Transfer Reforms

Ease of Vehicle Ownership Index Latest News

• India’s pre-owned vehicle market is booming, with used cars expected to outsell new ones at a ratio of 1.7:1 by 2030. Yet, complex and inconsistent state-level rules often force buyers and sellers to depend on costly intermediaries for ownership transfer. 
• A new report — the Ease of Vehicle Ownership Index (EVOI) — released by Minister of State for Road Transport and Highways recently, reveals stark disparities across states in how easily vehicles can be bought, sold, or transferred.

What the EVOI Report Says

• Prepared by IndiaTech.org (startup industry body) in partnership with Consumer VOICE.
• Covers 15 states, accounting for over 85% of India’s organised used-car market.
• Rankings (out of 10): 
  • Andhra Pradesh: 5.91 (highest)
  • Kerala: 5.74
  • Delhi & Tamil Nadu: 4.58 (tied)
  • Karnataka, Gujarat, Madhya Pradesh, Maharashtra, Telangana, Punjab, Rajasthan, Haryana follow
  • West Bengal: 2.56, Bihar: 2.51, Uttar Pradesh: 2.47 (lowest)
• Key Finding: No state crossed a score of 6 — even top performers lack a fully functional ecosystem. Only 2 states scored above 5.5; 8 states scored between 3.8–4.3, pointing to widespread structural issues.

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How States Were Evaluated

• The index assessed states on six metrics:
  • Clarity and consistency of ownership transfer rules
  • Functional availability and reliability of online systems
  • Speed, predictability, and procedural burden
  • Fee clarity, application tracking, and grievance mechanism
  • Consumer protection, dealer support, and trade infrastructure
  • Official fees versus actual all-in market cost of transfer

The Core Problem: Hidden Costs

• Cost is the weakest pillar — 12 of 15 states scored below 3.5 on this metric. Manual verification and informal payments inflate real transfer costs to nearly 10 times the statutory fee.
• Examples: In Bihar, a single transfer can cost ₹13,000–₹14,000 above the official VAHAN fee. At border RTOs in Tamil Nadu (Hosur, Krishnagiri), an ₹800 official fee can balloon to ₹7,000–₹8,000.
• Delays and Procedural Burden – RC (Registration Certificate) transfer times vary drastically: 
  • Andhra Pradesh: 7–10 days (uses biometric authentication for buyer, seller, and lender)
  • Uttar Pradesh: over 30 days
• In 13 of 15 states, applicants must file online and still submit physical copies to the RTO — defeating the purpose of digitisation.

Uneven Road Tax: Another Layer of Complexity

• Road tax on a ₹6 lakh petrol car varies from 3% in Uttar Pradesh to 14% in Karnataka — a difference of over ₹66,000 on the same vehicle.
• Only Andhra Pradesh and Telangana have a functioning refund mechanism for vehicles leaving the state.

Market Size and Trends

• India’s pre-owned vehicle market was valued at $36.4 billion in 2024-25, projected to reach $73.5 billion by 2030.
• The used-to-new vehicle sale ratio is expected to rise from 1.3:1 to 1.7:1 by 2030 — still below the 2.5:1 to 3:1 ratio seen in mature markets like the US and Europe.
• 60–65% of used-car buyers are first-time car owners, highlighting the segment’s role as a gateway to mobility for emerging middle-income households.
• Average used-car price rose from ₹4.49 lakh (2021) to ₹5.47 lakh (2025); average new car price is around ₹11.5 lakh (2024).

Proposed Solutions

• Fix a stepwise timeline for vehicle transfers through an amendment to the Motor Vehicles Act.
• Accept DigiLocker and mParivahan documents as primary evidence at every RTO, ending dual online-and-physical submission.
• Enable real-time integration between banks and VAHAN, so hypothecation is automatically removed once a loan is closed.
• Allow authorised dealers to clear pending challans during transfer without requiring the owner’s OTP.

Conclusion

• The EVOI exposes a fragmented, inconsistent used-vehicle transfer ecosystem across India, where state-level governance gaps, hidden costs, and procedural delays undermine a rapidly growing market. 
• As India’s pre-owned vehicle sector scales toward global benchmarks, harmonising rules, digitising processes fully, and ensuring fee transparency will be essential to make vehicle ownership genuinely accessible for India’s expanding middle class.

Source: IE