Scrap your old car, save on your next buy: What states offer as rebate

Scrappage policy aims to reduce vehicular pollution and make roads safe

The government has announced incentives for people who scrap their old vehicles and purchase new ones, aiming to ease pollution.
 

Under the Vehicle Scrappage Policy, customers buying a new personal vehicle after scrapping old ones can avail of a concession in vehicle price or road tax of up to 25 per cent. For commercial vehicles, the concession is 15 per cent.

Bihar, Madhya Pradesh, Uttar Pradesh, Haryana, Karnataka, Maharashtra, Gujarat, Punjab and Kerala have announced concessions. The scrappage policy is part of the government's broader efforts to phase out old and unfit vehicles, reduce air pollution and boost the automobile sector.

 

“According to a recent report 5 crore (50 million) private LMVs (light motor vehicles) on Indian roads are over 15 years old, causing considerable air pollution and are a hazard to other vehicles plying on Indian roads,” said Amit Lakhotia, founder and chief executive officer of Park+, (a company dealing in used cars and charging stations).

“A robust scrapping policy, which is accessible, executable and actionable for vehicle owners and the government, will be an incredible positive trigger for the Indian auto industry,” he said.

What is vehicle scrappage policy

It says that commercial vehicles older than 15 years and passenger vehicles more than 20 years old have to undergo fitness and emission tests to determine if they can continue running. Automated testing stations and vehicle scrapping provisions will be established in phases.

Life of Vehicles

According to rules for 2024, the life of a motorcycle will be seven years or covering a distance of 1,20,000 km, whichever is earlier.

For LCVs it is six and half years or 1,50,000 km of running

For Heavy Commercial Vehicles, the duration would be 10 years or 4, 00,000 km of running.

For all other vehicles, the maximum life is 15 years after which they will be scrapped. Vehicles that have been condemned will be scrapped too once they are 15 years old. 

Around 70,000 old vehicles, many owned by either central or state government agencies, have been voluntarily scrapped since the introduction of the Vehicle Scrap Policy in 2021. In Delhi, diesel vehicles older than 10 years and petrol vehicles older than 15 years are automatically deregistered and mandated to be scrapped. It is the only state to have such a policy.

Incentives provided by state governments

As many as 12 states offer a 25 per cent rebate on road tax when registering a new private vehicle after scrapping an old one.

Karnataka is offering a fixed rebate in road tax based on the price of the new private vehicle - for instance, Rs 50,000 for vehicles costing over Rs 20 lakh.

Uttarakhand is providing a 25 per cent concession or Rs 50,000, whichever is lower, for private vehicles.

Puducherry is offering a 25 per cent concession or Rs 11,000, whichever is lower, for private vehicles.

Haryana is offering a 10 per cent concession or lower of 50 per cent of the scrap value for private vehicles.

Scrap value incentive: Vehicle owners receive a scrap value equivalent to 4-6 per cent of the ex-showroom price of the new vehicle they purchase.