What is Vehicle Scrap Policy? What you Need to Know?

Vehicle Scrap policy, is one of the much awaited policy to be introduced to reduce the population of old as well as defective vehicles. The announcement about this policy was made in the Lok Sabha by Nitin Gadkari, Minister for Road Transport and Highways.

Aim of the policy

The main aim of the policy is to improve road and vehicular safety and at the same time bring down vehicular air pollutants

End of life vehicle

Vehicles failing the fitness test or failing to get the renewal of its registration certificate might be declared end of life vehicle.

Vehicle Scrap Policy helps achieve below Goals

• Formalizing the informal vehicle scrapping

• Better fuel efficiency

• Boost the availability of low cost raw materials for steel, electronics and the automotive industry.

Key Highlights of this Policy

o The Scrapping centre would offer scrap value to old vehicles, which would be nearing to 4 to 6 percent of the ex-showroom price of a new vehicle.

o The state government might be advised to offer road tax rebate nearing to 25 percent for personal vehicles and for commercial vehicles it would be around 15 percent.

o The vehicle manufacturers are advised to offer 5 percent discount, when a customer buys a new vehicle against the scrapping certificate.

o Additionally, they might have their registration fees waived off, when they purchase new vehicle against scrapping certificate.

o For RC and for fitness certificate renewal fee has been increased for commercial and personal vehicles, they would also require to pay an additional penalty in case of delay in the renewal of certificates.

o For older vehicles, different states would collect additional levy for green tax

o Vehicles would be deregistered automatically when they fail mandatory automated fitness test

o States can come forward and offer discount on road tax and vehicle manufacturers can also offer discount about 5% for the purchase of new vehicles against scraped ones.

o Vehicles owners might receive higher value, when they come forward to scrap their old vehicles

o Vehicle owners can take their old vehicle for scrapping at any centre, irrespective where they have registered their vehicle earlier.

o Vahan database will help the scrapping centers to maintain record and verify ownership of vehicles to be scrapped.

o Stolen vehicles would not be allowed to be scrapped at scrapping centers.

All these Vehicles would be Automatically Scrapped

o Government and PSU-owned vehicles above 15 years of age.

o Vehicles damaged in riots, fire or any devastation

o Manufacturers have declared it as defective

o Those confiscated by enforcement agencies.

Old Vehicles Plying on the Indian Roads

The Road Transport and highway ministry have shed light on old vehicles plying on the Indian roads.

Light Motor Vehicles

Older than 20 years old: 51 lakh light motor vehicles

Older than 15 years old: 34 lakh light motor vehicles

Medium and heavy commercial vehicles

Older than 15 years without a valid fitness certificate: 17 lakh

The minister has added, older vehicles pollute the environment more than 10 to 12 times when compared to fit vehicles.

What you need to know?

This is a win-win policy. For vehicles more than 15 years old, customers would require to spend more money to renew the registration. When there is a delay in renewing the registration of the above vehicles, they need to shell more money as the amount of penalty has also been increased.