Vehicle Scrappage Policy

The Vehicle Scrappage Policy is a government-funded programme to phase out old and unfit vehicles and replace them with modern and new vehicles on Indian roads. The primary goal of the policy is to create a system for phasing out dangerous and polluting vehicles. This will help achieve a lesser amount of pollution and a reduced carbon footprint in the country.


The Vehicle Scrappage Policy has several benefits like improved air quality, higher demand for safer and environmentally friendly automobiles like electric vehicles, opportunities in the metal recycling business, etc.

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What is Vehicle Scrappage Policy? 

The Vehicle Scrappage Policy is a government-funded initiative to replace outdated automobiles with new and modern vehicles. The policy was introduced on August 13, 2021. The goal of the scrappage policy is to lower emissions, provide employment possibilities and increase the demand for new cars. In order to strengthen their automotive sectors and reduce vehicular pollution, a number of nations - particularly Germany,US, Canada and China - have also implemented car scrappage programmes. 


In India, major automobile manufacturers including Mahindra & Mahindra's CERO, and Maruti Suzuki and Toyota's Maruti Suzuki Toyotsu, have built scrappage centres as a result of this policy. This also helps the "Green India" initiative by making room for a fleet of cleaner automobiles.


According to the Indian government’s scrappage policy, if commercial vehicles and passenger cars that are more than 15 and 20 years old, respectively, fail the emissions and fitness tests, the authorities will phase them out. The decision to do this will have certain advantages for the vehicle owners.


A method will also be in place to dispose of the unsuitable automobiles. According to the government, future automobile purchases should be made in a safe, secure, and technologically enhanced manner. 

Benefits of Vehicle Scrappage Policy 

Now that we know about the scrappage policy, here are some of the potential benefits this policy is expected to have for the economy, the automobile owners and the auto industry. 


  • Air pollution will be reduced and air quality will improve when unsuitable cars are scrapped and more environment friendly and less polluting cars (like electric cars) take their place.


  • The age of more than 50 lakh private and commercial light motor vehicles is over 20 years old. As old cars are scrapped and replaced with brand-new vehicles, there will be a greater demand for new automobiles . This will provide a significant boost to the Indian auto industry. 


  • Overall, the new scrappage policy will help the economy by creating additional work opportunities. For instance, new automobile scrapping facilities will require a work force, creating more employment opportunities.


  • New and technologically improved cars will be considerably safer. For instance, modern automobiles have greater safety measures.


  • In addition to all this, the owners of the scrapped vehicles will get a ton of benefits as well. Some examples of the benefits of vehicle scrappage policy for the owners are as follows: 


  1. For commercial and personal automobiles, states may offer a road tax credit of up to  15% and 25%, respectively. 

  2. Owners of scrapped vehicles will be compensated with a scrap value anywhere between 4-6% of the ex-showroom cost of the new car they want to buy. 

  3. There won't be any registration costs for a newly acquired car if the owner possesses a certificate of deposit. 


Latest Updates in Vehicle Scrappage Policy in 2022 


According to a formal notification from the Ministry of Road Transport and Highways, starting in April 2022, the cost of renewing the registration of personal and commercial vehicles which are more than 15 years old would be almost 8 and 62 times more than the current rate respectively.


There is a penalty of Rs. 300 each month if the registration renewal of personal automobiles is postponed. The fine for postponing commercial vehicle registration renewal is fixed at Rs. 500 per month. For commercial vehicles, the delay fee for the renewal of a fitness certificate is Rs. 50 per day.


In all likelihood, mandatory testing for personal automobiles will begin in June 2024, albeit gradually. However, testing for commercial cars is anticipated to start in April 2023. 


Moreover, the state and central government vehicles that are older than 15 years will all be scrapped as well in 2022.


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Vehicle Categorisation for Scrapping Policy 

  • Commercial Vehicles

These vehicles will be put through a fitness test once 15 years have elapsed. They will be permitted to operate if they clear this test. If not, they will be scrapped in accordance with the guidelines for commercial vehicles.

  • Government vehicles

Beginning on April 1, 2022, the government has put this policy into effect. All cars used by the state and federal governments that are older than 15 years will be subject to vehicle scrappage.

  • Private Vehicles

These vehicles will be tested after 15 years and only be permitted to operate on the roads if they clear this fitness test.

  • Vintage Vehicles

Due to their high maintenance and seldom use, vintage cars are exempt from India's policy on vehicle scrappage.

Fitness Test Under Scrappage Policy

The fitness test for vehicle scrappage will determine whether or not your vehicle can stay on the road. This test is basically a vehicle inspection that determines whether or not your vehicle is fit to drive on the road. The assessment will also determine whether or not the automobile is emitting pollutants beyond permissible limits. Not only that, the automobile also has to pass a number of other technical evaluations, including those that measure the engine's performance, brakes, and many more, to determine its actual value. These fitness evaluations will be performed in automated facilities.

Disadvantages of Keeping Older Vehicles 

  • The costs of renewing a fitness certificate for commercial and private vehicles may rise by 62 times and 8 times respectively. This will make it more expensive to maintain those automobiles that are older than 15 years. 


  • States will also levy a green tax on top of the road charge that must be paid.


  • Lastly, the owners of older vehicles will also miss out on the advancements made in the auto industry. Features like vehicle safety and fuel efficiency have all been improved over the years. 


We may undoubtedly hope to lessen the rising pollution and promote safer automobiles on the road with the vehicle scrappage policy. Similar to how it is risky to operate cars that are deemed unsuitable and unregistered by the policy, driving uninsured vehicles is also not advised. In the event of an accident, driving an uninsured vehicle might put you in financial difficulty in addition to legal issues. So, instead of delaying, look through the vehicle insurance plans on Bajaj Markets to acquire affordable premium rates right now.

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FAQs on Vehicle Scrappage Policy

  • ✔️What will happen if my vehicle fails the fitness test?

    Your car is permitted to undergo up to two retests if it fails the fitness test. Failure in those will prevent the acquisition of a registration certificate. Thus, it will be unable to operate on public roads.

  • ✔️When will the vehicle scrappage policy be implemented?

    The vehicle scrappage policy was introduced on August 13, 2021. It is being implemented in phases.

  • ✔️What are the benefits for vehicle owners under the vehicle scrappage policy?

    There are multiple benefits for vehicle owners under the vehicle scrappage policy. For the owners of commercial and personal automobiles, states may offer a road tax credit of up to  15% and 25%, respectively. The owners of scrapped vehicles will also be compensated with a scrap value anywhere between 4-6% of the ex-showroom cost of the new car they want to buy. The owners of scrapped vehicles will be exempted from paying registration costs for a newly acquired car.

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