Open Letter vs Completed Transfer

When a car is sold on an “open letter” or open file, the seller signs the transfer documents but no one completes the transfer at the ICT Excise office in Islamabad or the Punjab Excise MTMIS system for Rawalpindi. The registration book still shows the old owner’s name, and the signed papers simply pass from buyer to buyer. Some people do this to avoid the time and fees of a formal transfer, or to keep flipping the car without re-registering each time.

The problem is that, on paper, ownership has not moved at all. The person whose name is in the Excise record remains the legal keeper of the vehicle, no matter how many times the car has changed hands informally or how many signed letters exist. That gap between who drives the car and who officially owns it is where the risk lives.

For the buyer, an open-letter car means you do not truly own the vehicle in the eyes of the authorities. If the previous owner disputes the sale, passes away, or the paperwork is lost or later contested, proving your claim can become difficult. You may also inherit unpaid token tax or challans, and reselling or insuring a car that is not in your name is harder. For the seller, leaving the car on open file is equally dangerous: challans, accidents or legal issues involving the car can keep coming back to their identity long after they sold it.

The safe route is a completed transfer with biometric verification, where the Excise record is actually updated into the buyer’s name. Yes, it takes a visit and a fee that varies by engine size and the car’s age, but it gives both sides certainty and a clean break. If a seller pushes an open-letter deal, weigh that risk carefully — and consider insisting the transfer is completed before money changes hands.