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The Vehicle Scrappage Policy is a government-funded initiative to replace outdated automobiles with new and modern vehicles.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.
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.
For commercial and personal automobiles, states may offer a road tax credit of up to 15% and 25%, respectively.
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.
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.
Vehicle Categorisation for Scrapping Policy
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.
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.
These vehicles will be tested after 15 years and only be permitted to operate on the roads if they clear this fitness test.
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
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.