The Indian government introduced the Vehicle Scrappage Policy in 2021 to address the environmental impact of outdated and unsafe cars.
Key Highlights Of The Vehicle Scrappage Policy Include:
- Fitness testing for heavy commercial vehicles (HCVs) will be conducted only by automated testing stations (ATSs) starting April 1, 2023. The same rule applies to other Commercial Vehicles (CVs) and Private Vehicles (PVs) from June 1, 2024.
- Private and commercial vehicles over 15 years old failing the fitness test will be scrapped.
- The primary goals of the policy are to eliminate unfit vehicles, enhance road safety, formalise the car salvage market, create jobs, improve fuel economy, and provide raw materials to relevant industries.
Incentives For Vehicle Owners To Scrap Old Cars And Purchase New Ones Include:
- When purchasing a new car, owners receive a concession equivalent to the scrap value (4-6% of the new car’s ex-showroom price).
- No registration fees for the new car with a scrapping certificate.
- 5% concession from car manufacturers with a scrapping certificate and the scrap value concession.
- Road tax concessions from state governments (up to 25% for individual vehicles and 15% for commercial vehicles).
- Keeping an old car may increase fitness tests, registration renewal costs, and a green cess on road tax for used cars.
To Get Paid For Scrapping An Old Car In India:
- Contact an authorised scrap yard, schedule an appointment, and drive or tow the car to the centre.
- Submit required paperwork, including PAN, original RC, cancelled cheque, ELV certificate, and other verification documents.
- Scrapping involves removing tires, batteries, fluids, and various components, then recycling and reusing the remaining materials.
- Receive a Certificate of Destruction, which can be used for deregistration at the RTO and to avail concessions on a new car.
- Follow RTO regulations for scrapping, including submitting a letter, affidavit, original documentation, and confirmation letter from the scrapping centre.
What Effects Does Car Insurance Have When You Scrap Your Car?
When a car is scrapped, its registration certificate is cancelled, and you must inform your four-wheeler insurance company about the dismantling. The insurance company compensates the car insurance policy for the deregistered vehicle, preventing misuse of pre-existing information. Make sure that you have done the motor insurance renewal process on time. This can be easily done using a car insurance app.
Here’s what happens when cancelling car insurance for a scrapped car:
- Premium payments are no longer required after cancelling four-wheeler insurance coverage.
- If applicable, any premium reimbursement is determined pro rata.
- If you’ve filed a claim before scrapping, the policy is not immediately revoked; it continues until the following year.
- If you haven’t made claims, you can transfer the No Claim Bonus (NCB) to your new vehicle; you can obtain a concession when you buy car insurance online for the new vehicle and an NCB certificate.
- Buy car insurance online for your new car, and you can do it conveniently to compare coverage and prices.
- Use aBajaj Allianz car insurance premium calculator to check on the amount of premiums to be paid.
Get insured anytime, anywhere! Check out Bajaj Allianz General Insurance website to learn more and download the app now.
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