Vehicle Scrappage policy: What are the benefits?

old cars — Finance minister Nirmala Sitharaman hinted about the arrival of new vehicle scrappage policy. After that union minister of transport, Nitin Gadkari confirmed the same. The ministry claims that people who scrap their old car’s will be getting several benefits. Lets directly dive into the Vehicle Scrappage policy. what is it? and what are the benefits?

Car check and fitness — Before the policy, fitness certificates were needed only for commercial vehicles. All the commercial vehicles have to undergo fitness tests every 5-year. The new policy makes it mandatory for all cars, including private cars.

What is the Vehicle scrappage policy?

Vintage cars — 1. Every private vehicle that is older than 20 years should have a fitness certificate.
2. Every commercial vehicle older than 15 years would require a fitness certificate.
3. Old cars or Vintage and classic cars and bikes will have to pay additional green tax along with the fitness certificate.

What are determined in the fitness test?

Scrape vehicles in the scrap yard — 1. A detailed emission check and combustion check to determine the pollutants in the exhaust
2. Detailed check on engine condition and safety systems in the vehicle.
3. Overall condition check of the vehicle to avoid any miss happening due to condition of the vehicle.

old car — Union minister Nitin Gadkari said that there will be automatic fitness testing centers. These centers will be under public private partnership (ppp) and will be throughout the country soon.

Benefits with the Vehicle scrappage policy

Scrap yard new policy — People who scrap their old vehicle will get 4% to 6% of the ex-showroom price of the scrapped vehicle. They will also be receiving a scrapping certificate.

Vehicle scrappage policy — The Ministry has advised the automakers to offer customers with scrappage certificates a discount of around 5%. Point to be noted is that it is not mandated but “advised” the automakers in order to boost the sales of new cars.

Scrapped vehicles — The vehicle scrappage Policy also advises but not mandates, state governments to offer incentives to the people who scrap their old vehicles. The incentives will be in the form of lowered road tax and waived registration fees. To be clear the registration fees is not what you think it is, it is a fee for registering your vehicle and currently somewhere around ₹600 for cars.

Problem with the Vehicle scrappage policy

Rusty car — The government has decided to increase the RC renewal fees of old cars. The intention here is to discourage the re-registration of old vehicles.

How to apply for a vehicle Fitness certificate?

Check list — 1. Go to the official site of the Vahan Citizen Service and enter the registration number.
2. Enter the vehicle chassis number along with the registered mobile number and generate OTP.
3. Enter the OTP and fill the necessary details appearing in the screen.
4. Confirm the fees and make the payment
5. Upon Successful completion of the payment, you have to go to the online service key and select “application for fitness certificate” after that the application letter will be generated.
6. You have to take the application letter to the RTO examiner who will approve the date and time for the fitness test.

Points to be noted

Checking vehicle — 1. If the vehicle is not presented on the particular date given by the RTO examiner, then full fees have to be paid according to the law.
2. If any repair work needs to be done. The RTO examiner will point out and the repair work has to be done in order to get the vehicle certified.

What do we think?

Scrap yard — The Vehicle scrappage policy looks very significant on the surface. I mean it will encourage disposing of old polluting cars and buy new ones. The problem however is that a new system has to be structured and the testing and scrapping centers have to be set up. The Manufacturers are not bound by the ministry to give any discounts and considering BS6 and new laws (compulsory ABS, EBD etc.) , it is highly unlikely that you can get any discount . The Ministry has not mandated any of the benefits for a scrap certificate holder. The policy is expected to be implemented by 2024.
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