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Dealers in Punjab, one of the region’s largest pre-owned vehicle markets and estimated to be worth around Rs 1,000 crore, say petrol-car sales have slowed sharply as buyers worry about mileage, long-term compatibility and resale value.

The Tribune reports that some dealers describe the current slowdown in petrol cars as unprecedented, with premium petrol models particularly difficult to move and mid-segment inventory also beginning to pile up.

The important point is that this is currently a confidence problem as much as a mechanical one. There is no evidence of a nationwide wave of E20- engine failures. But used-car buyers are making decisions based on what they think may happen five or ten years from now, and uncertainty alone can damage resale values.

Used-car buyers are especially sensitive to risk because many vehicles in the market were designed when E10, not E20, was the prevailing fuel standard.

The government says extensive testing has found no need for engine modifications in older cars and no significant abnormal wear, drivability or startability problems. It has also cited service data covering 1.5 crore older Maruti cars where no E20- damage was reported.

There is, however, one qualification that matters in the used market. The road transport ministry has told Parliament that some BS-III vehicles introduced from April 2005 and manufactured before 2016 may require replacement of certain rubber components and gaskets when running on E20. The ministry says this can be handled during routine servicing.

That is not the same as saying E20 will destroy an older car. But for a buyer choosing between a ten-year-old petrol car and a diesel, CNG car or newer E20-compatible petrol model, even a small unresolved question can affect the decision.

The Punjab reports show exactly that behaviour. Dealers say customers who had increasingly preferred petrol over the past decade are again asking for diesel cars, while others are considering EVs.

That shift is also visible in the new-car market. In July 2026, petrol and petrol-ethanol cars accounted for 41.68 per cent of passenger-vehicle retail sales, down from 47.62 per cent a year earlier. CNG rose to around 24 per cent and EVs approached 8 per cent. Dealers have linked at least part of that movement to uncertainty around E20.

The used-car market makes the issue more important. More than 6 million used cars were sold in FY2026, and recent estimates put the market on course to cross 7 million units this fiscal. Petrol cars still form the largest part of used-car inventory.

If even a small percentage of buyers starts avoiding older petrol cars, dealers can be left holding stock for longer. That means higher financing cost, bigger discounts and eventually lower trade-in prices for owners trying to sell.

Punjab’s Assembly has already passed a resolution asking the Centre to suspend compulsory E20 use for vehicles not originally designed or certified for it. That political move adds another layer of uncertainty even as the Centre, ARAI and manufacturers continue to say E20 is safe under prescribed standards.

The two positions are not entirely contradictory. The government says testing shows no major durability problem. At the same time, it acknowledges that some older BS-III cars may need rubber parts or gaskets replaced and that fuel economy can fall modestly.

For a new-car owner under warranty, that may be manageable. For someone spending Rs 4 lakh or Rs 8 lakh on a used petrol car with an unknown service history, the perceived risk feels larger.

That is why clearer information matters now. Dealers need model-wise guidance on compatibility, owners need to know whether any preventive parts should be changed, and buyers need realistic mileage expectations. Until that happens, E20 may hurt older petrol cars even without physically damaging them. In a used-car market, uncertainty itself is enough to reduce demand and push prices down.