Bike and Car Renting Laws in Delhi

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Posted on | by pritesh K

Table of Contents

1. Policy Overview

Bike and car renting services in Delhi are governed by the Delhi Motor Vehicles Act, 1988, and other amendments issued by the Transport Department, Government of Delhi. These regulations ensure safety, liability, and protection for renters and vehicle owners.

1. Legal Framework

Bike and car rental services in Delhi operate under the Delhi Motor Vehicles Act, 1988, which governs vehicle registration, permits, insurance, and liability aspects. The Act has undergone multiple amendments to accommodate technological advancements, shared mobility, and rental services.

2. Registration & Licensing Requirements

  • Rental Companies & Aggregators:
    • Must be registered under the Delhi Transport Department.
    • Required to obtain a Transport Aggregator License if operating through an online platform or mobile application.
    • Need to comply with the Motor Vehicles Aggregator Guidelines issued by the Government of India.
  • Vehicle Owners:
    • Must ensure their vehicles are registered for commercial or rental purposes with a valid Rent-a-Cab (RTO) Permit.
    • Cannot use private vehicles for rental services.
  • Drivers (for Chauffeur-driven rentals):
    • Must hold a valid Commercial Driving License.
    • Must be verified by Delhi Police through background checks.

3. Permit & Insurance Requirements

  • Self-drive rental vehicles must have a valid Rent-a-Cab Scheme, 1989 permit.
  • Third-party liability insurance is mandatory for both self-drive and chauffeur-driven rental services.
  • Vehicles must comply with roadworthiness certifications issued annually by the Regional Transport Office (RTO).
  • Mandatory public liability insurance for rental service providers.

4. Safety & Compliance Measures

  • Helmet Rule (For Two-Wheelers):
    • Helmets must be provided for riders as per Section 129 of the Motor Vehicles Act.
    • Wearing a helmet is mandatory for both rider and pillion.
  • Speed Limits & Tracking:
    • Rental vehicles must comply with Delhi traffic speed limits (50 km/h for bikes, 60 km/h for cars).
    • GPS tracking is mandatory for rented vehicles under the Transport Department’s safety regulations.
  • Fitness & Pollution Control:
    • Vehicles must pass periodic fitness tests to ensure roadworthiness.
    • A valid Pollution Under Control (PUC) certificate must be carried.

5. Liability & Consumer Protection

  • Accidental Liability:
    • Renters are responsible for any damages or accidents during the rental period.
    • Security deposits and damage protection plans are standard practices.
  • Rental Agreement Terms:
    • Rental companies must provide a transparent rental agreement, covering:
      • Vehicle condition
      • Insurance coverage
      • Damage liability
      • Refund & cancellation policies
  • Penalty for Violations:
    • Over-speeding, reckless driving, and violating traffic norms may result in fines or contract termination.
    • Unauthorized subletting of a rented vehicle may attract legal action.

6. Digital Transactions & App-Based Rentals

  • Online and app-based rental services must adhere to:
    • Data privacy regulations as per IT Act, 2000.
    • Online payment security under RBI guidelines.
    • Transparent pricing and digital invoicing mechanisms.

7. Special Regulations for EV Rentals

  • Delhi government promotes Electric Vehicle (EV) rentals through subsidies under the Delhi Electric Vehicle Policy, 2020.
  • EV rental operators can avail financial incentives and tax exemptions.
  • Charging infrastructure must comply with Bureau of Indian Standards (BIS) guidelines.

8. Penalties & Enforcement

  • Illegal rental operations (without valid permits) attract fines starting from ₹5,000 to ₹10,000 per vehicle.
  • Uninsured vehicles used for rental purposes can lead to suspension of registration.
  • Failure to provide helmets or safety gear for two-wheeler rentals may result in fines or license revocation.

2. Terms and Conditions

  1. Age Limit: Minimum age for bike renting is 18 years, while for car renting, it is 21 years.
  2. License: Valid driving license (appropriate for the vehicle category) is mandatory.
  3. Usage Restriction: Vehicles must not be used for racing, illegal activities, or outside India’s territory without prior permission.
TermsDetails
Minimum Age18 years for bikes; 21 years for cars
Driving LicenseValid license required
Alcohol PolicyZero tolerance; driving under the influence is illegal
Damage LiabilityRenter is responsible for damages due to negligence

1. Age Limit

  • Bikes: The minimum age required to rent a bike is 18 years.
  • Cars: The minimum age required to rent a car is 21 years.

2. Driving License Requirement

  • The renter must possess a valid driving license appropriate for the category of the vehicle being rented.
  • International customers must present a valid international driving permit along with their home country’s driving license.

3. Alcohol & Drug Policy

  • Zero-tolerance policy towards driving under the influence of alcohol or drugs.
  • If a renter is found intoxicated while driving, penalties will apply, and the rental agreement may be terminated immediately.

4. Usage Restrictions

  • The vehicle must not be used for racing, speed testing, or any illegal activities.
  • The vehicle must not be taken outside India’s territory without prior permission from the rental company.
  • The vehicle must not be sublet or rented out to a third party.

5. Damage Liability

  • The renter is responsible for any damages due to negligence, improper handling, or misuse of the vehicle.
  • In case of an accident, the renter must report immediately to the rental service provider and follow legal procedures.
  • Insurance coverage (if applicable) will be as per the rental agreement, and excess charges may apply in case of damages.

3. Documents Required

  1. Valid Driving License
  2. Government-issued ID Proof (Aadhar, Passport, PAN, Voter ID)
  3. Proof of Address
  4. Passport-sized photographs

1. Valid Driving License

  • A valid and unexpired driving license is mandatory for renting a vehicle.
  • The license should be issued by the Government of India and must have the appropriate class for the vehicle you are renting (e.g., two-wheeler or four-wheeler).
  • Digital driving licenses stored in DigiLocker or mParivahan app are also accepted in most cases.
  • International Travelers: If you are a foreign national, you need an International Driving Permit (IDP) along with your home country’s valid driving license.

2. Government-Issued ID Proof (Any One)

  • To verify your identity, you need to provide one of the following government-issued identity proofs:
    • Aadhar Card (Preferred)
    • Passport
    • PAN Card
    • Voter ID
  • The ID must be clear, legible, and not expired.
  • The ID must match the details on the driving license.
  • Some services may ask for an Aadhar Card as it includes both identity and address proof.

3. Proof of Address (Any One)

  • If your ID proof does not have an address, you will need to submit a separate proof of address document.
  • Acceptable documents include:
    • Aadhar Card
    • Passport
    • Utility Bills (Electricity, Water, Gas) – Not older than 3 months
    • Bank Statement – Recent 3 months (with name and address)
    • Rental Agreement (If staying on rent)
    • Ration Card
  • This document ensures that the renter has a permanent or temporary residential address.

4. Passport-Sized Photographs

  • Two to three recent passport-sized color photographs may be required for documentation.
  • These photographs may be used for:
    • Rental agreement records
    • Verification purposes
  • The photo should be clear, with a plain background and the face clearly visible.

4. Agreement and Exclusions

Rental Agreement:
The agreement defines the rental period, charges, liabilities, and other details. Both parties must sign it before renting.
Exclusions:

  • Loss due to negligence is not covered by insurance.
  • Personal belongings are not insured.

The rental agreement is a legally binding document between the rental provider (Motoshare) and the renter. It outlines the terms and conditions, including:

  1. Rental Period:
    • The start and end date of the rental period.
    • Any extension policy and additional charges for extending the rental period.
  2. Rental Charges:
    • The total cost of renting the vehicle, including base charges.
    • Additional charges such as security deposits, late fees, fuel costs, or extra mileage fees.
  3. Liabilities and Responsibilities:
    • The renter’s responsibility for any damage, theft, or loss during the rental period.
    • The liability of the rental provider in case of mechanical failure or breakdown.
  4. Usage Restrictions:
    • Where and how the vehicle can be used.
    • Prohibited activities (e.g., off-roading, racing, or subleasing the vehicle).
  5. Insurance Coverage:
    • Details of the insurance policy covering the rental.
    • What is covered and what is not covered under the insurance.
  6. Security Deposit and Refunds:
    • The refundable security deposit amount.
    • Conditions under which the deposit will be deducted or forfeited.
  7. Termination of Agreement:
    • Circumstances under which the agreement can be terminated early.
    • Penalties for early termination.
  8. Signatures and Agreement:
    • Both the renter and the rental provider must read, agree, and sign the contract before the rental begins.

Exclusions

Certain risks and liabilities are not covered under the rental agreement or insurance:

  1. Loss Due to Negligence:
    • If the renter causes damage due to reckless driving, intoxication, or violation of traffic laws, it is not covered.
    • Any accidents or damages occurring due to the renter’s carelessness will be the renter’s financial responsibility.
  2. Personal Belongings Are Not Insured:
    • Any loss, theft, or damage to personal belongings left inside the vehicle is not covered by the rental provider or insurance.
    • Renters are advised to take care of their belongings and not leave valuables inside the rented vehicle.
  3. Unauthorized Use:
    • Any damages occurring while using the vehicle for commercial purposes, illegal activities, or subleasing are excluded from coverage.
  4. Mechanical Failures Due to Misuse:
    • If the vehicle experiences mechanical issues due to improper handling by the renter, the repair cost will not be covered.
  5. Natural Disasters and Acts of God:
    • Losses due to floods, earthquakes, or other natural calamities are generally not covered unless specifically mentioned in the agreement.

5. Cost Breakdown

Cost ComponentDetails
Fuel CostBorne by the renter
Interstate TaxesPaid by the renter for travel outside Delhi
Parking ChargesPaid by the renter
Toll TaxesPaid by the renter
Mechanical WarrantyIncluded in most agreements for breakdowns

1. Fuel Cost

  • Responsibility: Borne by the renter
  • Explanation: The renter is required to refuel the vehicle as per their usage. The rental company provides the vehicle with a certain fuel level, and renters must return it with the agreed fuel level to avoid additional charges.

2. Interstate Taxes

  • Responsibility: Paid by the renter for travel outside Delhi
  • Explanation: If the vehicle crosses state borders, the renter must pay the required interstate taxes at checkpoints. These charges vary depending on the state policies and duration of stay.

3. Parking Charges

  • Responsibility: Paid by the renter
  • Explanation: Any parking fees incurred during the rental period, including charges for malls, hotels, public parking areas, and private garages, are the responsibility of the renter.

4. Toll Taxes

  • Responsibility: Paid by the renter
  • Explanation: The renter must pay toll fees when using toll roads. If the vehicle has a FASTag, the amount is deducted automatically, and renters may need to reimburse the rental company.

5. Mechanical Warranty

  • Responsibility: Included in most agreements for breakdowns
  • Explanation: Most rental agreements include coverage for mechanical failures, meaning renters won’t be liable for repair costs due to normal wear and tear. However, damages caused by negligence or accidents may be chargeable.

6. Inclusions

  1. One helmet for bike rentals
  2. Basic insurance coverage for the vehicle
  3. Breakdown assistance
  4. Free cancellation within 24 hours (varies by service provider)

1. One Helmet for Bike Rentals

  • A single helmet is provided with each bike rental for the safety of the rider.
  • Additional helmets (for pillion riders) may be available upon request, depending on the service provider.
  • Helmets meet safety standards as per local regulations.

2. Basic Insurance Coverage for the Vehicle

  • Insurance coverage varies based on the service provider.
  • Typically includes third-party liability insurance (covering damage to others).
  • Some providers may offer comprehensive coverage, but users should confirm specifics before renting.
  • Damage to the rented vehicle may not be covered, so renters should check terms.

3. Breakdown Assistance

  • 24/7 assistance for mechanical failures (engine issues, battery failure, tire punctures, etc.).
  • Free towing service up to a certain distance (varies by provider).
  • Support for minor on-the-spot repairs (if possible).
  • Contact details for assistance are provided at the time of rental.

4. Free Cancellation Within 24 Hours (Varies by Service Provider)

  • Full refund if the cancellation is made within 24 hours of booking (subject to provider policies).
  • After 24 hours, cancellation charges may apply.
  • Some providers may offer partial refunds or rescheduling options.

7. Fuel Policy

  • Vehicles are provided with a full tank and must be returned with a full tank.
  • Fuel cost during the rental period is borne by the renter.

1. Full Tank at Pickup

  • Every vehicle is handed over to the renter with a full tank of fuel.
  • The renter is responsible for checking the fuel level before taking possession of the vehicle.

2. Full Tank at Return

  • The renter must return the vehicle with a full tank of fuel.
  • If the fuel tank is not full at the time of return, the renter may be charged a refuelling fee in addition to the fuel cost.

3. Fuel Costs During Rental

  • The fuel expenses during the rental period are the responsibility of the renter.
  • The rental company does not reimburse any fuel costs.
  • Renters must refuel with the correct fuel type (e.g., petrol, diesel) as specified in the vehicle’s manual.

4. Refuelling Charges & Penalties

  • If the vehicle is returned with less than a full tank, the renter will be charged:
    • Fuel refill charges based on the current fuel price.
    • Service fee for refuelling, which may be higher than regular fuel station prices.

5. Recommended Refuelling Guidelines

  • Renters are advised to refuel at a nearby fuel station before returning the vehicle.
  • Keep fuel receipts as proof in case of any disputes.
  • Ensure that only authorized fuel stations are used to avoid low-quality fuel issues.

8. Returning the Bike/Car

  1. Return on the agreed date and time to avoid late charges.
  2. Vehicle must be in the same condition as when rented.
  3. Additional charges apply for damages or excessive mileage.

1. Return Date & Time Compliance

  • The vehicle must be returned on the agreed date and time as per the rental contract.
  • Any delay in returning the vehicle may result in late fees, calculated on an hourly or daily basis.
  • If you anticipate a delay, inform the rental company in advance to check for possible extensions.

2. Vehicle Condition Upon Return

  • The bike or car should be returned in the same condition as when it was rented.
  • Any scratches, dents, or damages will be assessed upon return.
  • Ensure the vehicle is clean; additional charges may apply for excessive dirt or stains.

3. Fuel Policy

  • If the rental policy requires a full tank upon return, refill the fuel to avoid refueling charges.
  • Some rentals may charge based on the fuel used, so confirm the policy beforehand.

4. Damage Assessment

  • The rental company will inspect the vehicle for any damages beyond normal wear and tear.
  • Any new damage may incur repair charges based on the severity of the issue.
  • It is advisable to take pictures before and after the rental to avoid disputes.

5. Excess Mileage Charges

  • Rentals often come with a mileage limit, and exceeding this limit may lead to additional charges.
  • Check your rental agreement to know the allowed mileage and any excess charges per kilometer/mile.

6. Returning the Keys & Documents

  • Hand over the keys, rental agreement, and any other provided documents to the rental agency.
  • Failure to return keys may result in key replacement charges.

7. Refund of Security Deposit

  • If a security deposit was collected, it will be refunded after the final inspection.
  • Any deductions due to damages, missing accessories, or additional charges will be communicated.

9. Payment Procedure

Payment MethodDetails
Security DepositRequired before vehicle handover
Payment ModesCredit/Debit Card, UPI, Digital Wallets
Refund PolicyRefund of security deposit upon vehicle return after inspection

Security Deposit

  • A security deposit is mandatory before the vehicle is handed over to the renter.
  • The amount varies depending on the type of vehicle and rental duration.
  • This deposit acts as a precautionary measure against any damages or violations.

Payment Modes

  • The following payment methods are accepted:
    • Credit/Debit Cards – All major cards (Visa, MasterCard, RuPay, etc.) are accepted.
    • UPI (Unified Payments Interface) – Payments can be made via UPI-enabled apps such as Google Pay, PhonePe, Paytm, and others.
    • Digital Wallets – Payments through wallets like Paytm, Amazon Pay, and other approved e-wallets are supported.

Refund Policy

  • The security deposit is refundable once the vehicle is returned in good condition.
  • A thorough inspection will be conducted upon return to check for any damages, fuel levels, and compliance with rental terms.
  • If no issues are found, the deposit is refunded within the stipulated period (usually 3–7 working days).
  • Deductions may apply if there are damages, late returns, or policy violations.

10. GST Rate for Car or Vehicle Rental Services

  • GST for self-drive bike and car rentals: 18%
  • Chauffeur-driven rentals: 5%

Self-Drive Car & Bike Rentals (Without Driver)

  • GST Rate: 18%
  • Applicable on: Renting of motor vehicles (cars, bikes, scooters, etc.) where the customer drives the vehicle.
  • HSN Code: 9966 (Leasing or rental services concerning transport vehicles).
  • ITC (Input Tax Credit): Allowed (Business owners can claim ITC on input expenses).

✅ Example:

  • A customer rents a self-drive car for ₹1,000/day.
  • GST Calculation: ₹1,000 × 18% = ₹180 (GST).
  • Total Payable: ₹1,180.

2. Chauffeur-Driven Car Rentals (With Driver)

  • GST Rate: 5% (without ITC) OR 12% (with ITC)
  • Applicable on: Rental services where the vehicle is provided along with a driver.
  • HSN Code: 9964 (Passenger transport services).
  • ITC (Input Tax Credit): Not allowed if opting for 5%, but allowed if opting for 12%.

✅ Example (5% GST – No ITC):

  • A customer books a chauffeur-driven car for ₹2,000/day.
  • GST Calculation: ₹2,000 × 5% = ₹100 (GST).
  • Total Payable: ₹2,100.

✅ Example (12% GST – ITC Allowed):

  • A corporate customer books a chauffeur-driven car for business at ₹2,000/day.
  • GST Calculation: ₹2,000 × 12% = ₹240 (GST).
  • Total Payable: ₹2,240.
  • Company can claim ₹240 as ITC.

3. Special Cases

  • E-commerce operators (e.g., Uber, Ola, Zoomcar, Drivezy) collecting rental payments must charge GST at applicable rates.
  • Leasing of commercial vehicles (long-term lease) may attract different GST slabs (28% in some cases).
  • Electric vehicle (EV) rentals are charged at a reduced GST rate of 5%.

11. Renter’s Liability

  1. Liable for any damage caused due to negligence.
  2. Not liable for mechanical failures covered under warranty.
  3. Full responsibility for traffic violations during the rental period.

Liability for Damages Due to Negligence

  • The renter is responsible for any damage caused to the rented vehicle due to reckless driving, improper handling, or negligence.
  • Examples of negligence include:
    • Driving under the influence of alcohol or drugs.
    • Ignoring traffic laws, resulting in an accident.
    • Using the vehicle for illegal activities or off-road driving (if not allowed).
    • Leaving the vehicle unattended with keys inside, leading to theft.
  • The renter may be required to pay for repairs or replacement costs, depending on the rental agreement.

2. Not Liable for Mechanical Failures Covered Under Warranty

  • If the vehicle experiences a mechanical failure due to normal wear and tear or issues covered under the manufacturer’s warranty, the renter is not responsible for repair costs.
  • Common mechanical failures that fall under warranty include:
    • Engine breakdowns due to manufacturing defects.
    • Malfunctioning air conditioning or heating system.
    • Battery failures (unless caused by user error, like leaving the lights on).
  • The rental company must provide assistance or a replacement vehicle in such cases.

3. Full Responsibility for Traffic Violations

  • The renter is fully accountable for any traffic violations committed during the rental period.
  • This includes:
    • Speeding tickets.
    • Running red lights.
    • Illegal parking fines.
    • Toll violations.
  • The rental company may charge the renter’s credit card for any unpaid fines or transfer liability to the renter.
  • In some cases, administrative fees may be added for handling the fines.

12. Car/Bike Repair and Maintenance

Maintenance TaskResponsibilityDetails
Regular ServicingOwnerThe rental company or bike/car owner is responsible for scheduled servicing, including oil changes, brake checks, and overall vehicle inspection. This ensures the vehicle remains in good condition for renters.
On-road AssistanceProvided by rental serviceIf the vehicle breaks down during the rental period, the rental service typically provides roadside assistance. This may include towing, minor repairs, or arranging an alternative vehicle.
Tire Puncture RepairRenter’s responsibilityIf a tire gets punctured while in the renter’s possession, it is the renter’s duty to fix it or bear the cost of repair. Some rental services may offer optional insurance to cover such expenses.

13. Insurance and Mechanical Warranty

  1. Basic insurance coverage for third-party liability.
  2. Full coverage for mechanical breakdowns (not accidents).
  3. Personal accident cover can be availed separately.

Basic Insurance Coverage for Third-Party Liability

  • This covers damages or injuries caused to third parties (other vehicles, property, or people) due to an accident involving the rented vehicle.
  • It does not cover damages to the rented vehicle itself.
  • Typically required by law in most regions.
  • The coverage limit depends on the insurance provider and local regulations.

2. Full Coverage for Mechanical Breakdowns (Not Accidents)

  • Covers mechanical failures due to normal wear and tear (e.g., engine failure, battery issues, clutch wear, electrical failures).
  • Exclusions: Any damages caused due to accidents, reckless driving, or failure to follow the rental terms.
  • Rental agencies often provide a roadside assistance service in case of a mechanical failure.

3. Personal Accident Cover (Available Separately)

  • Protects the driver and passengers in case of injuries or fatalities resulting from an accident.
  • Coverage may include:
    • Medical expenses (hospital bills, treatment costs).
    • Disability benefits (compensation for permanent disability due to an accident).
    • Death benefits (compensation to the family in case of fatality).
  • This is usually offered as an add-on and is not included by default in rental insurance.

14. Additional Conditions

ConditionDetails
Interstate TravelAllowed with prior intimation
Multiple DriversAllowed if specified in the agreement
Traffic Rules ComplianceMandatory
Roadside Assistance24/7 support in case of breakdown

1. Interstate Travel

  • Allowed: Yes, but with prior intimation to the rental company.
  • Requirement: The renter must inform the rental company before traveling to another state to ensure proper documentation and avoid any legal issues.
  • Purpose: Helps in compliance with regional transport laws and avoids unnecessary penalties or restrictions.

2. Multiple Drivers

  • Allowed: Yes, if specified in the agreement.
  • Requirement: All drivers must be listed in the rental agreement and provide valid driving licenses.
  • Purpose: Ensures accountability and insurance coverage in case of accidents or damages.

3. Traffic Rules Compliance

  • Mandatory: The renter and all authorized drivers must strictly follow all traffic rules and regulations.
  • Penalty: Any fines or legal actions due to traffic violations will be the responsibility of the renter.
  • Purpose: Ensures safety and avoids legal issues during the rental period.

4. Roadside Assistance

  • Availability: 24/7 support in case of a breakdown or emergency.
  • Coverage: Includes towing, minor repairs, and emergency support depending on the rental company’s policy.
  • Purpose: Provides peace of mind to renters in case of unexpected vehicle issues.

15. Penalty for Non-Compliance

  1. Late return: ₹200/hour
  2. Traffic violations: Full liability on the renter
  3. Loss of documents (RC/Insurance): ₹5,000

1. Late Return Penalty

  • If the rented vehicle is returned later than the agreed-upon time, a penalty of ₹200 per hour will be charged.
  • The penalty will be calculated based on the delay in hours, and partial hours may also be considered for charges.

2. Traffic Violations

  • Any traffic violations committed during the rental period will be the renter’s full responsibility.
  • The renter will be liable to pay fines, penalties, or legal fees associated with the violation.
  • This includes, but is not limited to:
    • Speeding fines
    • Parking violations
    • Driving without a valid license
    • Drunk driving or reckless driving penalties

3. Loss of Documents (RC/Insurance)

  • If the Registration Certificate (RC) or insurance documents are lost while the vehicle is in the renter’s possession, a penalty of ₹5,000 will be imposed.
  • The renter is responsible for covering the cost of obtaining duplicate documents.