Dhanteras falls on Friday, 6 November 2026, and Diwali on Sunday, 8 November. If you are buying a used car in Delhi NCR this season, a seller will very likely ask you for a token amount to "hold" the car.
A token is normal, and often sensible. It shows you are serious and stops the seller from promising the car to the next caller. But a token handed over in a hurry is also where many used-car disputes begin: the seller backs out, the car turns out to have a running loan, or the person you paid was never the owner.
The short answer: pay a token only after you have checked the car and the seller against official records. Pay it to the registered owner (or an authorised dealer) through a traceable method, and get a signed receipt that says exactly when the money comes back. The rest of this guide walks through each step.
What a Token Amount Does (and What It Doesn't)
A token amount is a small payment that reserves a specific car for you for an agreed period. If the deal goes through, it is normally adjusted against the final price. If the deal falls through, what happens to the money depends almost entirely on what the two of you agreed.
There is no government-fixed token amount or format for private used-car sales. Online platforms set their own rules. Droom, for example, says its token is fully refundable if a deal doesn't close. An individual seller or a neighbourhood dealer can set very different terms, which is why the receipt matters so much.
A token doesn't transfer ownership, and it can't protect you from someone who never had the right to sell the car in the first place.
Why the Festive Rush Raises the Stakes
Demand is running high this year. Business Standard reported on 12 October 2026 that used-car sales are expected to grow 12–15% year on year in the October–December quarter. Cars24's Shivanshu Makkar told the paper that Dhanteras can bring three to four times the usual number of deliveries, and Spinny said it delivered 1,370 cars on the first day of Navratri alone.
When demand spikes, sellers push for quick tokens and buyers skip checks to lock in a delivery date. The calendar adds pressure too. With Diwali on a Sunday and more festival holidays early the following week, RTO processing may stall for several days. Plan your inspection, payment and document handover for the days before Dhanteras, not the day itself.
Is a Token Refundable? Earnest Money vs Part Payment
Indian courts have not laid down a special rule for used-car tokens, but general contract principles apply. The points below come from Supreme Court judgments in property cases. Treat them as a general guide, not legal advice.
- Earnest money can be forfeited if the terms clearly say so. In Satish Batra v. Sudhir Rawal (2012), the Supreme Court allowed a seller to keep the earnest money after the buyer defaulted, because the agreement clearly provided for it.
- A plain part payment is different. The same judgment said that money paid only as part of the price, and not as earnest money, cannot simply be forfeited.
- The label alone doesn't decide it. In K.R. Suresh v. R. Poornima (2025), the Court said calling a payment an "advance" doesn't settle what it is; courts look at what the parties intended.
- Courts differ on whether loss matters. In Kailash Nath Associates v. DDA (2015), the Court applied Section 74 of the Indian Contract Act to forfeiture of earnest money and said the law does not provide a windfall where no loss is suffered. In K.R. Suresh (2025), however, the Court held that Section 74 does not apply to forfeiting earnest money and upheld the seller's right to keep it.
The practical lesson is simple: write down, in plain words, whether your token is refundable, in which situations, and within how many days. A clear receipt prevents most arguments before they start.
Check These Before You Pay a Rupee
1. The seller is the registered owner
Ask for the registration number and check it on the Parivahan (VAHAN) vehicle details service or with Hooter's RC check. Match the owner's name on the RC with the seller's ID. If someone is selling "on behalf of" the owner, speak to the owner directly and pay the owner, not the middleman.
2. There is no running loan
If the RC shows hypothecation, the lender still has a say. The RC can't be transferred without the financier's written consent, so the seller must close the loan and get a no-objection certificate (NOC) before the sale can complete. Our guide on checking a used car for a loan or hypothecation shows you where to look.
3. Challans, insurance and PUC are in order
Check pending challans with Hooter's challan check or the official e-challan portal, and confirm that the insurance and PUC certificate are valid. In Delhi, PUC is more than a formality; read our explainer on the no-PUC, no-fuel rule.
4. The car's age works for Delhi NCR
Delhi's age limits for diesel and petrol cars decide how long you can use the car and what it will be worth when you sell. Go by the registration date on the RC, not just the model year. See Delhi's age rules for used cars and why manufacturing year and registration year can differ.
5. You have seen the car in person
Never pay a token for a car you have only seen in photos. Inspect it in daylight, take a proper test drive and, if possible, have a mechanic look at it. Our used car inspection checklist covers the essentials. If you want to lock the car before an inspection, agree in writing that you get the whole token back if the inspection fails.
Dealer or Individual Seller: Who Should Get the Money?
With an individual seller, pay into the registered owner's own bank account by UPI, NEFT or IMPS. Avoid cash, and avoid paying a relative, friend or "agent" unless the owner confirms it in writing.
With a dealer, ask who owns the car on paper. Since 1 April 2023, rules under the Central Motor Vehicles Rules (Rules 55A to 55H) have allowed dealers of registered vehicles to obtain an authorisation certificate. When an owner hands a car to an authorised dealer, the seller and the dealer notify the handover on VAHAN through Form 29C, and the dealer becomes responsible for the car until it is transferred to the next buyer.
Ask the dealer for its authorisation certificate and the Form 29C acknowledgement for the car you are booking. Don't assume every dealer has them. In a case before the Delhi High Court in December 2025, the petitioner said no used-car dealer in Delhi had registered under these rules, and the court asked the Delhi government to respond. Where there's no Form 29C, the person named on the RC is still the legal owner, so you'll need that person's signature on the transfer forms.
What Your Token Receipt Should Say
A one-line note saying "Received ₹X as token" is not enough. Your receipt should cover:
- Names, addresses, phone numbers and ID details of the buyer and seller (and the dealer's authorisation number, if it has one)
- Car details: registration number, make, model, variant, colour, chassis and engine numbers, and the odometer reading
- The agreed total price, the token amount, the balance due and the date by which it must be paid
- How the token was paid, with the transaction reference
- Whether the token will be adjusted against the final price
- When the token is fully refunded: for example, if the inspection fails, the VAHAN record doesn't match, an undisclosed loan or challan turns up, or the seller backs out
- What happens if you back out: refunded, partly refunded or kept
- The deadline for completing the sale and handing over the car
- What comes with the car: original RC, spare key, service records, insurance policy and any bank NOC
- Who will file Forms 29 and 30 for the RC transfer, and who pays the fees
- The date, both parties' signatures, and a copy for each side
Red Flags: Fake Listings and Advance Scams
Advance-payment fraud tends to rise when demand does. In July 2025, Gurugram police arrested a couple who had paid genuine sellers to take down their online car ads and then re-listed the same cars as their own, PTI reported. One victim paid a ₹50,000 advance on a Toyota Fortuner, and the accused admitted to 15 cases worth about ₹2 crore. The Delhi Police cyber cell's advice is blunt: avoid accepting or making advance payments, and treat urgency as a warning sign.
Walk away if you see:
- A price well below similar cars, with pressure to "book now"
- A seller who is "posted out of town" (often claiming to be in the armed forces) and can't show the car
- A request to pay someone whose name doesn't match the RC
- A QR code to scan or a request for your UPI PIN; you never need your PIN to receive money
- A refusal to share the registration number, or a blurred number plate in every photo
If you've been cheated, call the national cyber-crime helpline 1930 or report it at cybercrime.gov.in as soon as possible. For a refund dispute with a dealer, the National Consumer Helpline (1915) is a useful first step before approaching a consumer commission.
After the Token: Closing the Deal Before Dhanteras
- Pay the balance only against documents. Have the original RC, insurance and PUC in front of you, and make sure any loan has been closed with the lender's NOC in hand.
- Sign a delivery note. Record the date and exact time of handover and the odometer reading. Until the RC changes, the seller remains the owner on record, so this protects both of you.
- File the transfer on time. Under Section 50 of the Motor Vehicles Act, the seller reports the sale within 14 days (45 days if the car is moving to another state) and the buyer applies within 30 days. Our ownership transfer guide for Delhi NCR covers Forms 29 and 30 step by step.
- Move the insurance into your name within 14 days of the transfer; see used car insurance transfer in Delhi.
- Sort out the FASTag. The old tag can't move with the car; here's what buyers and sellers must do.
Frequently Asked Questions
How much token amount should I pay for a used car?
There's no fixed rule. Keep the token small relative to the price (an amount you could afford to have tied up in a dispute) and pay it only after you have checked the RC and seen the car.
Is the token refundable if the seller backs out?
It should be, and your receipt should say so. If a seller takes your token and then sells the car to someone else, that is a breach of your agreement, and a clear written receipt makes the money far easier to recover.
Can I pay a token online for a car I haven't seen?
It's risky. If you must, use a platform with a written refund policy, verify the RC online first, and make the token fully refundable if the car or the documents don't match what you were shown.
The Bottom Line
Most token disputes come down to three gaps: an unchecked car, the wrong payee and a vague receipt. Close all three before you pay, and a festive-season booking is as safe as any other.
Shortlisting a car for Dhanteras? Browse used cars in Delhi NCR on Hooter and run the registration number through Hooter's RC check and challan check before you talk money. Wondering whether festive offers are worth it? Read whether Diwali used-car deals are really cheaper.