Cancel Bike RC After Scrapping

Total Loss (TL) of a two-wheeler refers to a situation where repair costs exceed a defined threshold, making the vehicle uneconomical to repair. In insurance terms, this scenario is assessed against the Insured Declared Value (IDV), which represents the maximum claimable amount based on the bike’s age, condition and market value.

When a two-wheeler sustains severe damage in an accident, insurers calculate the repair costs and compare them to the IDV. If the repair expenses exceed 75% of the IDV, the vehicle is deemed a total loss. In such instances, the insurer is liable to pay the IDV, thereby compensating the policyholder for the irreparable damage.

It is important to note that this condition applies only to standalone or comprehensive two-wheeler insurance policies, as third-party bike insurance does not cover total loss scenarios. Policyholders should review their insurance terms for detailed information on claim settlements. This framework ensures reliable, informed decisions.

Also Read: Bike Registration Transfer Online

A Registration Certificate (RC) is an official document that proves your bike is registered with the government. It includes key details like the bike’s registration number, model, engine number and the owner’s name. Essentially, the RC works like an identity card for your bike, confirming that it meets all legal requirements to be driven on public roads.

This bike registration certificate is necessary for buying, selling or insuring your bike and helps authorities track its history and ownership. Without a valid RC, your bike is not legally compliant, which can lead to fines or other legal issues.

Also Read: RC Book and Bike Ownership Transfer

In the event of a total loss of your bike, you can proceed with scrapping it, but there are specific procedures to follow. Once the insurance company declares your bike a total loss, you must not dispose of it immediately.

• First, sell the bike’s parts to a registered scrap dealer who will dismantle the vehicle for repurposing and recycling the parts.

• Following this, cancel the bike’s Registration Certificate (RC) as mandated by the Regional Transport Office (RTO).

Under Section 55 of the Motor Vehicles (MV) Act, 1988, bike owners must revoke their RC once their vehicle is scrapped. The owner must inform the RTO about the total loss within 14 days. Plus, the RTO will require clearance from the local police station to confirm that the bike's parts have been sold and processed in accordance with the scrapping regulations.

Also Read: How to Download RC Online with DigiLocker and Vaahan

Step 1: Take clear photographs of your scrapped bike as proof of its condition.

Step 2: Get an affidavit confirming that your bike has been scrapped.

Step 3: Inform your Regional Transport Office (RTO) about the scrapping of your bike.

Step 4: Provide all the required documents, including photographs and the affidavit, to the RTO.

Step 5: The RTO will coordinate with your local police station to obtain a clearance certificate.

Step 6: You will be informed once the cancellation process is underway.

Step 7: The RTO will cancel your bike’s RC and issue a non-utilisation certificate confirming the cancellation.

If you are scrapping an old or accident-damaged bike, you must submit the following documents to the RTO to cancel its Registration Certificate (RC):

• A Scrap Certificate issued by the authorised scrap dealer as proof that your bike has been dismantled.

• An application for RC Cancellation, which is a formal request to the RTO to cancel the registration of your scrapped bike.

• An Affidavit of scrapping as a legal declaration confirming that your bike has been scrapped.

• A valid insurance policy is required even if the bike is being scrapped.

• The latest Pollution Under Control (PUC) Certificate of your bike.

Even if your bike is being scrapped, having an active bike insurance policy is essential, as it is a legal requirement. Opting for at least a basic third-party bike insurance with TATA AIG ensures smooth processing of scrapping and legal compliance.

To Prevent Misuse by Fraudsters

Cancelling your bike’s Registration Certificate (RC) once it is scrapped helps prevent misuse by fraudsters. When a scrapped bike still has an active RC, criminals might misuse the valid registration details to create counterfeit documents or sell the bike’s identity to unsuspecting buyers.

This fraudulent activity can lead to significant financial and legal troubles for the original owner. Cancelling the RC ensures that the scrapped bike cannot be involved in illegal transactions.

To Protect Against Vehicle Theft

Thieves could exploit an active RC on a non-operational bike to claim ownership or disguise the bike’s history. By cancelling the RC immediately after scrapping, you officially mark the vehicle as out of circulation.

This action eliminates the risk of the bike being misappropriated or misused, thereby protecting you from potential theft-related complications and ensuring that the bike’s records accurately reflect its status.

To Avoid Legal Troubles

Maintaining a valid RC for a scrapped bike can create confusion regarding ownership, potentially leading to legal disputes in the future. If the bike is ever connected to any legal matters, an active RC might inadvertently involve you in unnecessary complications or liabilities.

Cancelling the RC clearly indicates that the bike has been scrapped, protecting you from any future legal issues that could arise from its misuse or misrepresentation.

To Comply with Vehicle Scrappage Policy

Cancelling the RC is also essential to comply with the Government of India’s Vehicle Scrappage Policy, introduced in the Union Budget 2021. Under this policy, personal vehicles must undergo a fitness test after 20 years, while commercial vehicles are tested after 15 years.

If a bike is found unfit to run on roads, the owner has the option to scrap it and cancel its RC. This process not only fulfils legal obligations but also contributes to environmental sustainability by reducing air pollution and improving fuel efficiency.

Cancelling your bike’s Registration Certificate after scrapping is a crucial step in protecting yourself from potential fraud, legal complications and misuse of your vehicle’s identity. By following the prescribed procedures and submitting all necessary documents, you ensure that your scrapped bike is officially removed from circulation.

At TATA AIG, we understand the importance of comprehensive protection and seamless claim processes. Our bike insurance plans are designed to offer you the utmost security and peace of mind—whether you are dealing with accidents, total loss or any other unforeseen incidents. With TATA AIG, you receive not only reliable coverage but also dedicated support during the claims process in the event of a total loss.

Does scrapping a bike provide any monetary benefit to the owner?

Generally, the insurance company handles the scrapping process and compensates you as part of your policy benefits. This compensation is not a direct payment for scrapping but rather part of your overall claim settlement.

Is it necessary to have an active bike insurance policy before cancelling the RC?

Yes, it is essential to maintain an active insurance policy to receive any applicable compensation benefits during the cancellation process.

Does cancelling the RC remove my name as the registered owner?

Yes, once you cancel your bike’s Registration Certificate (RC), your name is removed as the registered owner, effectively terminating your ownership.

What is the typical timeline for cancelling the RC of a scrapped bike?

The process generally takes from a few days to a couple of weeks, depending on the efficiency of your local RTO and whether all required documents are submitted correctly.

Can I cancel the RC for a bike registered in a different city?

Yes, you can cancel the RC for a bike registered in another city. However, you may need to provide additional documentation, such as a No Objection Certificate (NOC) from the RTO where the bike was originally registered.