A test drive policy for a used car showroom: licence, gate pass, accompanied drives and overnight approvals

Most showrooms have a test drive policy. Usually it lives in the head of the senior salesperson, and it changes on a busy Sunday. The car goes out with a customer nobody checked, comes back with a scrape nobody noticed, and three weeks later a challan arrives for a time nobody can account for.

A written policy fixes most of that, and it does not need to be long. This guide covers what the rules require of a dealer, then each part of a policy that works on a real floor.

What the rules require

Since 1 April 2023, dealers in registered vehicles have worked under Rules 55A to 55H of the Central Motor Vehicles Rules. Three of them bear directly on test drives:

• Rule 55D: what stock cars may be used forA car you hold after Form 29C may be used in a public place only for a reasonable trial or demonstration for a prospective purchaser, for trips to and from repairs or painting, and for trips to renew the RC, fitness or PUC. While it is out, your authorisation certificate number must be shown on a conspicuous part of the car, readable from at least fifteen metres.
• Rule 55E: the trip registerBefore each trip, you or your representative enter it in the electronic trip register, Form 29F, on the portal: the date, the registration number, the purpose, the driver's name, the driver's licence number, and the time the car left. A printout travels with the driver and must be produced on demand. The return time is filled in when the car comes back.
• Rule 55C: who answers for the carAfter Form 29C is filed, the dealer is the deemed owner, solely responsible for the validity of the car's documents and for all incidents relating to it. That includes the test drive.

The Motor Vehicles Act adds two basics, as the Supreme Court set them out in 2008: under Section 3, no one may drive a motor vehicle in a public place without an effective driving licence, and under Section 5, no owner or person in charge of a vehicle shall cause or permit anyone who does not satisfy Section 3 or the age rules in Section 4 to drive it. Our guide to the dealer authorisation certificate covers the dealer rules in full.

1. The licence check

• See the licenceThe physical card, or the licence in DigiLocker or the mParivahan app. MoRTH's 2018 advisory asked states to treat documents shown through those apps at par with the originals.
• Check it fitsThe photo matches the person, the licence is within its validity date, and it covers the class of vehicle being driven.
• Record the numberForm 29F asks for the driver's name and licence number, so write it down before the keys move, not after.
• No licence, no driveA customer without one can still ride along while your staff drives. Make that the standard answer, so nobody has to improvise it.

2. The gate pass

The simplest rule on the floor is no pass, no keys. Every test drive gets a gate pass before the car moves, and whoever is on the gate checks it. The pass should name the car, the customer, the salesperson going along, the time out, the expected time back and the purpose. The trip register entry and the gate pass can be made at the same moment; one should never exist without the other.

3. Accompanied drives

• Someone from the showroom goes alongEvery standard drive has a salesperson in the car. It is safer for the car, and it is when most selling happens.
• A set routePick a few routes near the showroom that show the car fairly: some traffic, a stretch of open road, a speed breaker. A fixed route makes it obvious when a drive has gone off plan.
• A time limitDecide what a reasonable trial means for your stock, write it into the policy, and put the expected return time on the pass.
• Who drives firstMany showrooms have the salesperson drive the car out of the premises and hand over on the road. Decide once and keep to it.

4. Overnight and home drives

Some buyers want to show the car at home, or drive it to their own mechanic. These drives are where losses and arguments come from, so treat them as exceptions:

• The owner approves, in writingNever the salesperson alone. The approval names the customer, the car and the return time.
• More identityAn address proof as well as the licence, and a record of who else will drive, with their licence too.
• Paperwork in the carThe Form 29F printout and the car's documents travel with it.
• Is it still a trial?Rule 55D allows a reasonable trial or demonstration for a prospective purchaser. Whether a long or overnight drive fits that is the owner's judgement to make, and a reason to keep these drives rare.

5. Insurance cover

Every car that goes out needs valid insurance. IRDAI's Motor Insurance Handbook reminds owners that driving a motor vehicle in a public place without insurance is a punishable offence under the Motor Vehicles Act. Check the stock car's policy is current before the drive, not after an accident.

Read the exclusions too. The handbook lists exclusions that usually apply, including driving without a valid driving licence and driving under the influence of alcohol or drugs. That is one more reason the licence check is not optional. Ask your insurer in writing how your policies treat drives by prospective buyers, and keep the answer on file.

The handbook also lists what should be in the car while it is on a public road: the certificate of insurance, a copy of the RC, the PUC certificate and a copy of the driver's licence. Add the Form 29F printout for a stock car.

6. Recording the start and the end

• At the startTime out, odometer reading, fuel level, and photos of all four sides and the wheels.
• At the endTime back, odometer reading, fuel level, the same photos, and a walk around with the customer still there if anything looks new.
• The return time in Form 29FRule 55E requires it at the end of the trip. Fill it in when the car is back, not at the end of the day.
• The leadWhat the customer said and the next step, on the lead, the same day.

When a challan arrives weeks later, this record is how you find out who was driving. Without it, the deemed owner pays.

A one-page policy

• Who may driveA holder of a valid licence for the class of car, seen and recorded. Anyone else rides along.
• Before the car movesGate pass issued, Form 29F entry made, insurance current, certificate number displayed, start readings and photos taken.
• On the roadAccompanied by staff, on a set route, within the time limit.
• ExceptionsUnaccompanied, overnight and home drives only with the owner's written approval and extra identity.
• AfterEnd readings and photos, Form 29F return time, damage check, and the lead updated.

Where Kenro Dealership fits

Kenro Dealership runs test drives as a process. A drive is scheduled against the lead and the car, a gate pass is issued, the car is marked out, and the start and finish are recorded. Overnight drives wait for the owner's approval in the same approvals queue as bookings and edits, so nobody approves them by phone. The Form 29F register itself is filed on the government portal; Kenro Dealership keeps the showroom's own record straight so that entry is easy to make. See what it covers.

Questions dealers ask

Can a dealer let a customer test drive a car that is not in the dealer's name?

Rule 55D allows a car held under Form 29C to be used in a public place for a reasonable trial or demonstration for a prospective purchaser, with the authorisation certificate number displayed and the trip entered in the Form 29F register before it starts.

What should a showroom check before a test drive?

A valid driving licence that covers the class of car, seen and with its number recorded, a current insurance policy on the car, a gate pass, and the Form 29F trip entry. Record the odometer, fuel and photos at the start.

Who is responsible for a challan or accident during a test drive?

After Form 29C is filed, Rule 55C makes the dealer the deemed owner, solely responsible for all incidents relating to the car. A start and end record shows who was driving at the time.

Should a used car showroom allow overnight test drives?

Only as an exception, with the owner's written approval, extra identity from the customer, and the car's documents and Form 29F printout in the car.

Sources

• Gazette of India: G.S.R. 901(E), 22 December 2022, Rules 55A to 55H and Forms 29A to 29F (PDF)
• Supreme Court of India, Oriental Insurance Co. Ltd v. Zaharulnisha, 29 April 2008, setting out Sections 3 and 5 of the Motor Vehicles Act, 1988 (PDF)
• PIB, Ministry of Road Transport and Highways, 9 August 2018: DL and RC in DigiLocker or mParivahan to be accepted
• IRDAI: Motor Insurance Handbook (PDF)