Summary
India’s Vehicle Scrappage Policy encourages phasing out old or unfit vehicles to reduce pollution and improve road safety. Older cars must undergo fitness tests, and those that fail are scrapped through authorised centres following RTO guidelines. Deregistration requires surrendering documents and verification by authorities. The policy promotes recycling, lowers manufacturing costs, offers incentives on new vehicles, and supports safer, cleaner mobility.
Introduction
To address the issues of pollution, road safety, and a downfall in the automobile sector, the Government of India recently announced a Vehicle Scrappage Policy. The policy will work on removing unfit and old vehicles from roads. These old vehicles will be scrapped as per the guidelines of the vehicle scrappage policy. The policy is vital in reducing pollution, recycling useable parts of an old vehicle, thus reducing manufacturing costs and improving vehicle sales.
However, the vehicle owner has the option of selling or transferring the vehicle to the neighbouring state before the RC expires. It will require a NOC from the RTO, transfer of RC, and updating RTO records which is a long process with a lot of paperwork and there is also a risk of illegal use of the vehicle. Alternatively, scrapping the old vehicle is much more simple and safer. If you decide to scrap your car, remember to cancel your car insurance policy once you get your RC cancelled.
Old vehicles running on roads tend to cause 10-12% more pollution and are a threat to safety. Currently, there are a huge number of vehicles running on Indian roads, which are more than 15 years old. The Vehicle Scrappage Policy has made it mandatory for all the old vehicles to undergo a fitness test before re-registration. If it fails the test, the vehicle is declared an End-of-Life Vehicle (ELV). A commercial vehicle of more than 15 years of age and a private vehicle of more than 20 years of age will have to be deregistered and scrapped according to the policy. The government is also focusing on setting up fitness testing centres and scrapping centres to implement this policy.
RTO has laid down the following guidelines to scrap a vehicle:
● Contact an authorized scrap dealer and register your vehicle for scrapping.
● When taking the vehicle to the scrap dealer, carry all the original documents such as RC, fitness certificate, owner’s PAN card, AADHAR card, and address proof. The dealer will check the documents and verify the records of stolen vehicles. The scrap dealer is required to maintain copies of all the documents as per regulation.
● The scrap dealer performs a physical inspection of the vehicle and quotes a price accordingly.
● The vehicle owner can negotiate the price quoted for different parts depending on their condition. Once a price is agreed upon by both parties, vehicle parts are removed and segregated.
● The scrap dealer ensures that while removing all the gases and oils from various parts nothing is discharged into the environment.
● The chassis number is removed before the vehicle is sent for scrapping and recycling.
● The vehicle owner should inspect the scrapping process so that no parts are reused in any illegal activity. Keep a picture of the scrapped vehicle and chassis number removed from the vehicle, for RTO procedure to de-register the vehicle.
● Finally, the scrap dealer issues a ‘certificate of vehicle scrapping’ which is uploaded to the VAHAN database.
● Inform the authorized RTO in writing about the vehicle scrapping and the reason for scrapping.
● Surrender the original RC of the vehicle and the chassis number removed from the vehicle at the time of scrapping. RTO will keep both as records.
● Submit an application for deregistration along with an affidavit mentioning that car has no dues such as loans, car insurance claims, or court cases pending. The affidavit should also confirm that vehicle is not involved in any theft or illegal activity.
● RTO will verify the documents and all records of the vehicle with the RTO database.
● Once diligence reports from traffic police and National Crime Records Bureau (NCRB) are received, the vehicle is deregistered.
After the deregistration, the registration number is free for use and can be allotted to any other vehicle so it is important to notify the car insurance company about scrapping the vehicle. Once the vehicle is deregistered, get the insurance also cancelled.
● The policy will ensure cleaner air by checking the fitness of old vehicles and removing the ones that fail the fitness tests.
● It will improve road safety as there will be constant monitoring of vehicles so any vehicle that is a threat to road safety is removed. There will be more vehicles on road, with advanced safety features.
● It will boost the automobile industry as there will be an increase in sales with old vehicles being removed with proper tracking of the defined life-cycle of any vehicle.
● It will reduce the manufacturing costs of vehicles due to spare parts and metal recycling.
● It offers many incentives to the vehicle owners with a scrapping certificate, such as a 4-6% rebate on buying a new vehicle, a rebate in road tax, and waiving off registration fees on buying a new vehicle.
● It will generate employment with the setting up of new fitness testing centres and vehicle scrapping facilities.
A Registered Vehicle Scrapping Facility is an authorised centre approved by the government to dismantle old or unfit vehicles safely. These facilities follow strict standards for recycling parts, handling hazardous materials responsibly, and updating the VAHAN database with scrapping certificates. Using an RVSF ensures the entire process is transparent, environmentally safe, and recognised by the RTO for deregistration.
The implementation of a vehicle scrapping policy is not just a boon for the automobile industry. It will benefit all the stakeholders. It is environmentally friendly, beneficial for vehicle owners, helpful for the government to implement road safety measures, a breakthrough for industries using recycled metal and other parts, and also help reduce the cost of insurance. With advanced and safer cars, car insurance becomes cheaper and the insurers have fewer claims to settle. A win-win situation for all!
The scrapping age limit follows national guidelines, but implementation may vary slightly across states. Generally, private vehicles over 20 years and commercial vehicles over 15 years must undergo fitness tests, and those that fail are declared unfit and marked for scrapping.
The scrap value is based on factors like the vehicle’s weight, condition of parts, metal recovery, and current market rates for recyclable materials. Authorised scrap dealers inspect the car and offer a price depending on the usable components.
If a vehicle is scrapped without proper deregistration, it remains active in the RTO records. This may lead to complications such as continued tax liability, misuse of the registration number, or issues during future documentation checks. Deregistering through the RTO closes the record permanently and protects the owner from legal or financial risks.
Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.
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