Vehicle Scrappage Policy for Private Vehicles 2025

• The vehicle scrappage policy for private vehicles was introduced in India in 2021 to phase out old, polluting vehicles and promote a greener environment.
• As of 2024, the vehicle scrappage policy is fully operational, with mandatory fitness tests for older vehicles and incentives for scrapping unfit vehicles.
• The policy categorises vehicles into four types: government vehicles, commercial vehicles, private vehicles, and vintage vehicles.
• The process includes deregistration at the RTO, inspection, and scrapping at an authorised Registered Vehicle Scrapping Facility (RVSF).
• Scrapping a vehicle under the car scrapping policy cancels its registration and insurance.

Old, unfit, and poorly maintained vehicles are major contributors to environmental pollution in India. To tackle this issue, the Indian government introduced the vehicle scrappage policy for private vehicles significant step toward reducing pollution and improving road safety.While vehicle scrappage policy for private vehicles aims to remove these outdated vehicles from the roads, it also encourages owners to transition to newer, more efficient models.In this article, we will delve deeper into what the vehicle scrappage policy for private vehicles entails and how the scrappage value of a car is determined.

The vehicle scrappage policy is a government-funded initiative introduced in 2021. Its goal is to remove old, unfit, and polluting vehicles from Indian roads. This policy promotes the use of modern and environment-friendly vehicles to lower the country's carbon footprint.Under the car scrapping policy, vehicles must undergo a mandatory fitness test once they reach a certain age. For private vehicles, this age is 15 years. The same threshold applies to commercial vehicles. The fitness test is important as it determines if a vehicle is still roadworthy or should be scrapped. These tests are conducted at automated centres and focus on emission levels, safety standards, and overall vehicle condition.Vehicles that fail the fitness test are marked for scrapping. Owners of these vehicles are encouraged to scrap them and receive incentives to buy newer, more efficient models. The vehicle scrappage policy for private vehicles reduces pollution and improves road safety by removing outdated vehicles from circulation.

The vehicle scrappage policy for private vehicles in India has undergone several key developments since its conception. Below is a timeline that captures the major milestones and announcements related to the policy

• 2015 : The Government of India begins discussions on the need for a vehicle scrappage policy to address the rising pollution and safety issues associated with old vehicles.
• March 2021 : The vehicle scrappage policy for private vehicles is officially announced during the Union Budget by the Finance Minister, focusing on phasing out old and unfit vehicles.
• August 2021 : The scrappage policy is launched by the Prime Minister during the Investor Summit in Gujarat. It marks the beginning of infrastructure development for scrapping facilities across the country.
• October 2021 : The Ministry of Road Transport and Highways issues several key notifications. This includes the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021, which provide the framework for establishing Registered Vehicle Scrapping Facilities (RVSFs). The rules came into effect on 25 September 2021.
• April 2022 : The fitness testing of vehicles becomes mandatory, with fees revised under the policy. Vehicles failing the fitness test are encouraged to be scrapped, with owners receiving incentives.
• January 2023 : New regulations are issued, stating that vehicles owned by Central, State, and UT governments will not have their registration renewed after 15 years.
• September 2023 : This mandatory fitness testing is extended to 1 October 2024 through Automated Testing Stations (ATS).
• Upcoming in 2024 : The scrappage policy will see further implementation of fitness testing for various vehicle categories, with an emphasis on expanding the network of ATS and RVSFs across the country. The government is also expected to introduce more incentives and regulations for successful phasing out of unfit vehicles under the old vehicle scrap policy .

Listed below are some of the benefits of the new vehicle scrappage policy for the economy, the
automobile sector, vehicle owners, and the environment.Let's take a look

• The new advanced vehicles will be comparatively safer as they come with superior safety features. It reduces the risk of accidents and improves overall road safety.
• The vehicle scrappage policy for private vehicles promotes the recycling industry by providing a steady supply of scrap materials, which can be reused in manufacturing, thus supporting sustainable practices.
• Vehicle owners benefit from tax incentives and discounts on the purchase of new vehicles. Therefore, it makes the old vehicle scrap policy a financially attractive option.
• The policy contributes to less air pollution and better air quality by removing older, more polluting vehicles from the roads and encouraging the use of cleaner, more efficient models.
• Vehicle owners can get the best car scrappage price for workable parts like tires, batteries, and metal.

The vehicle scrappage policy for private vehicles categorises vehicles into four main types: government vehicles, commercial vehicles, private vehicles, and vintage vehicles. Here’s how each category is defined and regulated under the policy

• Government Vehicles : This category includes vehicles owned by central, state, and union territory governments. These vehicles are mandated to be scrapped after 15 years of service. The old vehicle scrap policy ensures that these vehicles are replaced by newer and more efficient models to reduce environmental impact.
• Commercial Vehicles : Vehicles used for commercial purposes, such as buses, trucks, and taxis, must undergo a mandatory fitness test after 15 years. If these vehicles fail the fitness test, they are required to be scrapped under the vehicle scrappage policy for private vehicles.
• Private Vehicles : Personal vehicles, such as cars used for daily commuting, fall under this category. These vehicles are subjected to a fitness test after 15 years. This fitness certificate will be issued for 5 years. However, if deemed unfit, the vehicles will be deregistered and scrapped. Owners of such vehicles may receive incentives based on the scrappage value of the car .
• Vintage Vehicles : Vintage vehicles are a special category, usually defined as vehicles that are over 50 years old and have been well-maintained. These vehicles are not subjected to the same stringent regulations as other categories. Instead, they are preserved as historical artefacts and their scrappage is not mandated by the policy. However, they must still meet basic safety and environmental standards to be used on the roads.

If your vehicle's registration is due for renewal, follow the given steps under the vehicle scrappage policy for private vehicles

• Automated Testing Stations (ATS) : Before you decide to scrap your vehicle, it must undergo a mandatory fitness test at an Automated Testing Station (ATS). These government-approved centres conduct detailed inspections of your vehicle’s roadworthiness, emissions and safety features. If your vehicle passes the test, it can continue to be used; if it fails, scrapping may be the recommended option. Make sure to schedule your test well in advance to avoid delays.
• Nearest Authorised Scrapping Facilities : If your vehicle fails the fitness test or you decide to scrap it directly, you should take it to a Registered Vehicle Scrapping Facility (RVSF). These facilities are authorised under the vehicle scrappage policy for private vehicles to dismantle vehicles in an environment-friendly manner. The reusable parts are salvaged and hazardous materials are disposed of safely at these facilities.
• Consider the VAHAN Database : The VAHAN database is expected to integrate all ATS and RVSFs, which makes it easier for vehicle owners to find nearby testing and scrapping facilities. This online system will check the status of your vehicle’s fitness test and locate the closest authorised centres. Before scrapping your vehicle, make sure that the facility you choose is listed in the VAHAN database to avoid any complications.
• Waiting for ATS Operationalisation : In some areas, ATS may not yet be fully operational. If this is the case in your region, it might be wise to wait until the system is fully functional. Once all ATS are up and running, the process of testing and scrapping your vehicle will be more simple and accessible.
• Documentation and Compliance : When you decide to scrap your vehicle, make sure all documentation is in order. This includes the Certificate of Deposit, which is necessary to claim any benefits under the vehicle scrappage policy of private vehicles. Proper documentation also verifies that the process is legally compliant and that you receive the appropriate scrappage value of your car.

Here are the key incentives available under the vehicle scrappage policy for private vehicles for scrapping old vehicles in India

• Concession on Registration Fees : When you scrap your old vehicle, the registration fee for the new vehicle you purchase is either significantly reduced or completely waived. This reduces the overall cost of getting a new vehicle on the road.
• Discount on Road Tax : Owners who scrap their vehicles receive a concession of up to 25% on road tax for non-transport vehicles and up to 15% for transport vehicles when purchasing a new vehicle. This incentive is part of the vehicle scrappage policy for private vehiclesto encourage the phasing out of old, polluting vehicles.
• Discount on Purchase Price of New Vehicle : Many manufacturers offer a discount of around 5% to buyers who present a scrapping certificate as proof of having scrapped their old vehicle. This is a direct benefit under the scrappage value of car scheme.
• Waiver of Liabilities : Some states provide a waiver of pending liabilities, such as fines or penalties, on the old vehicle when it is scrapped at an authorised centre.

Also Read: How to Pay Road Tax in India?

Follow the given steps to scrap a car in India under the vehicle scrappage policy for private vehicles

• Step 1: Deregistration and Documentation: Before scrapping your car, visit your local Regional Transport Office (RTO) to cancel the vehicle’s registration. You will need to submit a request for deregistration and provide all necessary documents such as the Registration Certificate (RC), Pollution Under Control (PUC) certificate and your identification proof.
• Step 2: Visit an Authorised Vehicle Scrapping Facility (RVSF): Locate and visit an Authorised Vehicle Scrapping Facility (RVSF) recognised by the government. These facilities are registered under the car scrapping policy and are equipped to handle the scrapping process in an environmentally friendly manner. Make sure that the facility is listed on the VAHAN database.
• Step 3: Hand Over the Vehicle: At the scrapping facility, hand over your vehicle along with the deregistration documents. The facility will verify the documents, inspect the vehicle and proceed with the scrapping process.
• Step 4: Receive the Scrappage Certificate: After your vehicle is scrapped, the facility will issue a Certificate of Deposit or Scrappage Certificate. This certificate validates that the vehicle has been officially scrapped under the vehicle scrappage policy for private vehicles.
• Step 5: Avail Incentives: Use the Scrappage Certificate to claim incentives such as a discount on the purchase of a new vehicle, a waiver on registration fees and a concession on road tax. The scrappage value of the car is also provided, which can be received as a bank transfer or cheque.

The table below highlights the fees under the vehicle scrappage policy for private vehicles

Note : These fees are subject to variation depending on the specific RTO and scrapping centre involved.

When you decide to scrap your car under the vehicle scrappage policy for private vehicles, it has direct implications for your car insurance .Here’s how scrapping your vehicle affects your insurance policy

• Cancellation of Insurance Policy : Once your vehicle is scrapped under thevehicle scrappage policy for private vehicles , its registration is automatically cancelled by the RTO. This further leads to termination of your car insurance policy, as the vehicle is no longer legally registered or operational.
• Pro-rata Refund : If you have paid for your car insurance in advance and decide to scrap your vehicle before the policy period ends, you may be eligible for a refund. This refund is generally calculated on a pro-rata basis, meaning you will receive a portion of the premium back for the unused months. However, if you have already made a claim during the policy period, you might not receive a refund, or the refund could be adjusted accordingly.
• Prevention of Misuse : Cancelling your car’s insurance after scrapping is important to prevent the misuse of the vehicle’s documents. If the RC and insurance are not properly cancelled, there is a risk that the scrapped vehicle's details could be used for fraudulent activities.
• Impact on New Vehicle Insurance : When you purchase a new vehicle, you will need to obtain a new insurance policy. Sometimes, insurers may offer discounts or incentives if you present a scrappage certificate, linking it to the new policy under the scrappage policy.

Also Read: What is the Importance of Motor Insurance?

In pursuit of a greener environment, the vehicle scrappage policy for private vehicles was introduced in India in 2021. This policy targets old and polluting vehicles, requiring them to undergo a fitness test at authorised centres. Vehicles that fail this test must be scrapped at registered facilities. Scrapping your vehicle also affects your car insurance, as the policy is cancelled once the vehicle is deregistered.Overall, by adhering to the vehicle scrappage policy for private vehicles, we can contribute to a cleaner, safer, and more sustainable future on Indian roads.