Here’s How Much You Can Save By Scrapping Your Old Car And Buying A New One

With the scrappage certification in hand, you can draw handsome benefits from the government as well as the carmaker

• As per the scrappage policy, if your car is older than 20 years, it has to get a fitness test. 

• If found unfit, the car will be illegal to run on the road. 

• If you scrap your old car, the government will offer a 4-6 percent discount on the ex-showroom price of a new vehicle. 

• Vehicle manufacturers have been directed to offer a 5 percent discount. 

• A road tax rebate of up to 25 percent on the new car to be given depending on the state government. 

• All this could bring down prices by Rs 60,000 to Rs 70,000.

The Ministry of Road Transport and Highways (MoRTH) has given us further developments on the vehicle scrappage policy. The ministry has announced four incentives for those scrapping their old car and buying a new one. 

(1) The scrap value of the old vehicle, which will be approximately 4-6 percent of the ex-showroom price of a new vehicle, will be given by the scrapping centre. 

(2) The manufacturer of your next purchase is also advised to offer a discount of 5 percent on the ex-showroom price against the scrapping certificate.

(3) State governments may be advised to offer a road tax rebate of up to 25 percent for personal vehicles 

(4) Registration fee might also be waived for the new vehicle. 

Among these four benefits, the first two have been confirmed. If you buy a new car, you will get a discount from the government. Further, a fixed discount of 5 percent will be offered by your new car manufacturer. 

• Scrap your car to get the Best Price

Registration fee waiver and road tax rebate will depend on state authorities. Also, the taxes/RTO charges vary from state to state. All this could bring down the price of a Rs 6 lakh car down by Rs 60,000 to Rs 70,000! Here’s an example of how much you can save if you buy a Maruti Suzuki Baleno base-spec Sigma variant at its on-road price in Delhi: 

Note: There could be further savings depending on the registration fee and road tax. 

The scrappage policy states that if a private vehicle is older than 20 years and it fails to get a renewal of its registration certificate, it may be declared as ‘End Of Life Vehicle’. In such a case, the car will not be allowed to ply on the roads and should be scrapped. The criteria to determine vehicle fitness will primarily include emission, braking and safety equipment tests. 

The government is also planning to increase the fees for these fitness tests. Alongside, the government is also working on setting up Registered Vehicle Scrapping Facilities (RVSF) across the country, and will encourage public and private participation for these centres. 

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The government has also given tentative dates for the proposed scrapping policy application, which is as follows: 

1. Rules for fitness tests and scrapping centres: October 1, 2021

2. Scrapping of government and PSU vehicles above 15 years of age: April 1, 2022

3. Mandatory fitness testing for heavy commercial vehicles: April 1, 2023

4. Mandatory fitness testing (phased manner for other categories): June 1, 2024