Vehicle Scrappage Policy in India

The scrap policy in India is a programme funded by the government, and it has been introduced to replace old vehicles that are not in good condition with newer and modern alternatives. The primary purpose of the policy is to remove polluting vehicles from running on the roads and subsequently lower the country’s carbon footprint.

The vehicle scrappage policy was introduced by the Prime Minister of India, Mr Narendra Modi, in Gujarat at an Investor Summit. The key highlights of the government scrap policy for vehicles are:

The policy aimed to scrap unfit cars and bikes

According to the Ministry of Road Transport and Highways (MoRTH), if you choose to scrap your old vehicle, you will be eligible for incentives.

The Vehicle Scrapping Policy 2023 will help in reducing pollution density.

The policy shall pave the way for safer, cleaner and technologically updated vehicles.

Since India has a vast variety of vehicles running on the roads, the rules applied to scrap these vehicles shall vary depending on the categorisation of the vehicles.

Private vehicles: All private cars must undergo a fitness test after 15 years of their registration. If the car clears the fitness test, renewal of registration can be done which is valid for 5 years.

Commercial vehicles: Commercial vehicles, like buses, trucks, etc., are eligible for fitness tests every two years for the first 8 years of registration and every one year after 8 years till the registration age of the vehicle reaches 15 years.

Government vehicles: All State and Central government vehicles that are above 15 years of age will be scrapped.

Vintage vehicles: Old car scrap policy does not apply to vintage vehicles as they are mostly well-maintained and driven less frequently.

If a vehicle fails the fitness test, it will be considered an End-of-Life Vehicle (ELV) if it fails the fitness test and will be scrapped.

If your vehicle fails the fitness test, here are some RTO rules to be followed for scrapping your vehicle.

Write a letter to the concerned RTO informing them about the scrapping of your vehicle.

Submit an affidavit to the RTO stating that the vehicle is clear from any pending traffic challan, court cases, insurance claims, loans, etc.

Simultaneously, contact an authorised scrap dealer and register for scrapping. When you go to the dealer, ensure you have all the necessary documents.

Your original vehicle documents must be surrendered, and the VIN plate must be cut out after scrapping.

The scrap dealer issues a ‘Certificate of Vehicle Scrapping’ and the same is uploaded on the VAHAN portal.

Additionally, you are required to submit a confirmation document to the RTO mentioning details of the scrap dealer and images of the scrapped vehicle.

In addition to pollution control and improved safety on roads, the scrapping policy in India comes with several benefits:
It will result in a boom in the automobile industry in the years to come

The policy will also help improve exports

There will be a likelier reduction in the import of crude oil

The sector will attract investments and create job opportunities for individuals

The aforementioned benefits for the country will be passed on to the customers in the form of the following incentives for scrapping old vehicles:

Avail discount: Under the new scrappage policy, vehicle manufacturers will give a discount for buying new vehicles against the scrappage certificate.

No registration fee: Individuals will not have to pay a registration fee for the purchase of new vehicles.

Rebate: State departments will also provide a tax rebate, which is 25% for PVs and 15% for CVs.

Considering the above-mentioned incentives, this is the time to replace old vehicles with new ones and have them secured with comprehensive insurance for your vehicles to optimise safety on the roads.

If your vehicle is nearing its registration renewal, you have two options available under the Vehicle Scrappage Policy for private vehicles as well as others. You can either retain the vehicle or scrap it.

• To retain the vehicle, visit the authorised Automated Testing Station (ATS)

• To check the fitness of your vehicle, you can visit an Automated Testing Station (ATS), which uses mechanical equipment to automate the various tests. Click here to check the list of ATS centres.

• To scrap the vehicle, visit the nearest Registered Vehicle Scrapping Facility (RVSF)

• To scrap your vehicle, you can visit your nearest Registered Vehicle Scrapping Facility (RVSF); a few of them have already been operational. You can view the state-wise available RVSF here.

For private vehicles (Light Motor Vehicle - Non-Transport)

For commercial vehicles

<td>Medium Goods /Passenger Vehicle</td>
<td>₹ 1,300 (automated testing)</td>

<td>Heavy Goods /Passenger Vehicle</td>
<td>₹ 1,500 (automated testing)</td>

<td>Medium Goods /Passenger Vehicle</td>
<td>₹ 10,000</td>

<td>Heavy Goods /Passenger Vehicle</td>
<td>₹ 12,500</td>

Firstly, you must inform your insurer about your vehicle’s scrapping. Since your vehicle’s registration gets cancelled automatically upon scrapping, your two or four-wheeler insurance also gets cancelled. With no insurance, you are not obliged to pay premiums, but there are a few things you must know:

If you are eligible for any refund from your bike or car insurance provider for premiums paid before the scrapping, it will be calculated on a pro-rata basis.

Moreover, if you had raised a claim a year before your vehicle was put for scrap, the insurance policy will not be cancelled immediately; instead, it will be cancelled in the succeeding year.

When you plan to buy car insurance, ensure the policy secures your vehicle and yourself against unfortunate scenarios. However, for an informed purchase, it is always recommended to compare car insurance plans to find a suitable cover.

The four-wheeler insurance policy by Tata AIG comes with a choice of unique add-ons that strengthen the cover and protect riders against unpleasant situations.

The scrappage policy is an important step toward a greener world as it focuses on gradually phasing out old vehicles that have high emissions and deteriorate air quality. This policy will not only help increase the demand for new vehicles but also ensure that the emission levels are better controlled.

What is the scrap value of a car after 15 years?

The scrap value is mandated to be around 4-6% of the ex-showroom price of the new vehicle.

What is the new Vehicle Scrapping Policy, 2023?

Vehicle Scrappage Policy India came into force in 2021. From April 1, 2023, fitness testing of Heavy Commercial Vehicles (HCVs) was scheduled to be conducted through Automated Testing Stations (ATSs), however, it has now extended to Oct 1, 2024.

What does a Fitness Test check in vehicle scrappage policy for private vehicles?

The fitness test determines whether the vehicle is fit to run on the roads and its impact on the environment.