Nearly 80% cars bought on loans; govt rules out parking proof rule

The Centre has ruled out any move to mandate proof of parking for vehicle registration, even as it flagged the growing strain of traffic congestion in urban India. In a written reply in the Rajya Sabha on Wednesday, Road Transport and Highways Minister Nitin Gadkari said there is currently no legal provision requiring vehicle buyers to submit an affidavit confirming availability of parking, and no such proposal is under consideration.

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The response comes amid periodic policy discussions in cities like Delhi and Mumbai on linking car ownership to parking availability as a way to curb congestion. However, the government made it clear that traffic bottlenecks cannot be directly attributed to vehicle registrations based on false parking affidavits. Instead, it pointed to a broader mix of factors, including inadequate public transport, rising private vehicle usage, and weak parking management systems.

Significantly, the data disclosed in Parliament underscores the scale of India’s credit-driven auto market. Of the 45.86 lakh four-wheelers registered in calendar year 2025, as many as 36.67 lakh or 79.96% were purchased through hypothecation-cum-loan agreements with banks and financial institutions.

This highlights the deep integration between automobile sales and retail credit, particularly from banks and non-banking financial companies (NBFCs). Any regulatory intervention linking car purchases to parking availability could have had ripple effects across the auto and lending ecosystem. By ruling out such a move, the Centre has effectively maintained the status quo for both sectors.

The government also clarified that it does not maintain data on whether banks seek parking-related affidavits while sanctioning vehicle loans. More importantly, it indicated that there is no plan to issue guidelines or directions to financial institutions on this aspect.

In effect, both ends of the vehicle ownership pipeline, registration and financing, remain free of any parking-linked compliance requirements at the central level.

The Centre’s stance places the onus squarely on state governments and urban local bodies to address congestion challenges. The states are free to design their own mechanisms to manage rising vehicle density and parking shortages.