Vehicle Scrappage Policy

Vehicle Scrappage Policy

Vehicle Scrappage Policy

The Policy

The strategy intends to eliminate obsolete, inefficient and polluting automobiles by establishing an infrastructure for automated vehicle testing after the registration term for the automobile has ended. According to the law, a registration certificate for a passenger vehicle is valid for 15 years from the date of issue, and for a commercial vehicle, it is valid for a period of 10 years. After the 10- or 15-year session gets completed, the scrappage policy will take effect. After that, the vehicle must pass a necessary fitness test. Once a commercial vehicle reaches the age of 8 years, it is required by law to renew its fitness certificate every year. Such cars will be required to pass the test every 2 years for the first 8 years. The policy is expected to increase the use of environmentally friendly automobiles, reduce reliance on imported oil from other countries, and reduce pollution. Scrappage Vehicle Policy is intended to advance in the direction of environmentally friendly vehicles, encouraging green mobility, reducing reliance on importing oil from other countries, and lowering pollution.

Vehicles will be evaluated based on their ability to pass a fitness test.

Fitness tests are necessary to determine the vehicle's quality if it is still safe to operate, and how much of an impact it will have on the environment. After passing several testings such as braking tests, engine performance, and others, a vehicle will be declared fit or unsuitable. If a vehicle passes the fitness test, it must retake it every 5 years to maintain compliance. After 15 years, a valid fitness certificate will be required for the renewal of registration certificates. In the case of private automobiles, the renewal certificate will be valid for 5 years.

Which automobiles will be discarded?

Vehicles will not be discarded only because of their age under the new policy. They will be scientifically tested through authorized, automated testing centres, as previously stated.

  • Unfit automobiles will be scrapped in a scientific manner, ensuring that all registered vehicle scrapping facilities across the country are technologically advanced and transparent.
  • Unfit vehicles are ones that have failed a fitness test, have been damaged by fire, riot, natural disaster, accident, or any other tragedy, have been judged obsolete or beyond repair, or have outlived their usefulness.
  • If a vehicle fails the fitness test, it is judged unfit for road use, and its registration certificate is not renewed.
  • If the appellate authority orders it, one re-test will be allowed following the appropriate repair, rectification, and re-inspection. If the vehicle fails the re-test as well, it will be classified as an end-of-life vehicle (ELV). Owners of such vehicles would have the option of scrapping their automobiles because it is a voluntary scheme.

Scrapping obsolete vehicles have its own set of incentives

The Centre has announced a number of incentives for persons who retire their old and inefficient vehicles.

  • To begin with, owners of such vehicles will receive a scrap value that is equal to 4% to 6% of the ex-showroom price of the new vehicle they will be purchasing.
  • Second, if the owner presents a certificate of deposit, there will be no registration fees for a new car purchased.
  • Finally, state governments have been requested to provide tax breaks for motor vehicles. Personal vehicles will receive up to a 25% concession, while commercial vehicles would receive up to a 15% concession.
  • Fourth, vehicle makers have been urged to offer a 5% discount on new vehicle purchases made with a certificate of deposit.
  • Purchasing a new vehicle will help reduce maintenance costs and allow users to save more fuel costs.
  • The re-registration fee is proposed to be hiked around 8 times for personal vehicle and around 20 times for commercial vehicle rather than this buying a new EV is beneficial.

Disincentives for keeping old automobiles on the road

Owners of vehicles older than 15 years would find it more costly to keep them, as the cost of renewing a fitness certificate could increase by 62 times for commercial vehicles and 8 times for individual automobiles. Furthermore, states will levy a green fee in addition to the road charge that every vehicle owner must pay.

Implementation of the Proposed Scrapping Policy

  • The fitness test and scrapping centre rules will take effect on October 1, 2021.
  • Vehicles belonging to the government and public sector that are over 15 years old will be scrapped beginning April 1, 2022.
  • Heavy commercial vehicles will be subject to mandatory fitness tests from April 1, 2023.
  • Compulsory fitness tests for other categories will come into effect from June 1, 2024, in a phased manner.

Scrapping facilities with licensed scrapping stations and automated testing stations

According to the road map, the Centre has required the establishment of automated testing facilities to reduce manual vehicle testing. 75 stations have been proposed to be built in the first phase. After that, it will be expanded to 450-500 stations across the country. The government has also encouraged private companies to invest in the construction of such stations through the public-private partnership (PPP) approach in collaboration with state governments. Similarly, registered car scrapping facilities will be established across the country to encourage safe vehicle scrapping. In the next 4-5 years, the Centre hopes to build 50-70 such facilities.

'A win-win situation for all parties involved’

Vehicle prices would be reduced, and sales would increase because of the low-cost raw material obtained from destroyed vehicles. As per solarmarts the policy will improve production, create jobs, and raise our savings. Scrap will offer copper, aluminium, steel, plastic, and rubber to the industry, lowering the cost of new automobiles.

We at SOLARMARTS believe that, ‘The automobile sector contributes 7.5 percent to GDP; this program, which was initially stated in the Union Budget, would increase the automobile sector for electric vehicles. The Government of India's decision to implement a vehicle scrappage policy is both timely and beneficial.’




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