Vehicle Scrappage Policy: These States Are Offering Rebates For Scrapping Your Old Car

Vehicle Scrappage Policy: Individuals who buy a new vehicle after scrapping their old one can benefit from a discount of up to 25 per cent on the price of the vehicle or road tax for personal cars

The government has unveiled a new Vehicle Scrappage Policy aimed at encouraging the removal of old vehicles from the roads and promoting the purchase of new ones to curb pollution. Under this policy, individuals who purchase a new vehicle after scrapping their old one can benefit from a discount of up to 25 per cent on the price of the vehicle or road tax for personal vehicles. For commercial vehicles, the discount is set at 15 per cent.

Several states, including Bihar, Madhya Pradesh, Uttar Pradesh, Haryana, Karnataka, Maharashtra, Gujarat, Punjab, and Kerala, have embraced these incentives as part of the broader initiative to phase out outdated and environmentally harmful vehicles. The policy's goal is not only to address air pollution but also to rejuvenate the automobile sector.

Vehicle Scrappage Policy Explained

The policy mandates that commercial vehicles over 15 years old and passenger vehicles older than 20 years undergo fitness and emission tests to assess whether they can continue operating. Automated testing stations and scrapping facilities will be introduced in stages to support this initiative.

Vehicle Lifespan Regulations

Under the new rules for 2024, the lifespan of various vehicle types is being standardized. Motorcycles are limited to seven years or 120,000 kilometers, whichever comes first. Light commercial vehicles (LCVs) have a lifespan of six and a half years or 150,000 kilometers, while heavy commercial vehicles can operate for up to 10 years or 400,000 kilometers. All other vehicles have a maximum lifespan of 15 years, after which they must be scrapped. Additionally, vehicles deemed unfit will also be scrapped once they reach 15 years of age.

Since the Vehicle Scrap Policy's introduction in 2021, nearly 70,000 old vehicles, many owned by central or state government agencies, have been voluntarily scrapped. In Delhi, diesel vehicles older than 10 years and petrol vehicles older than 15 years are automatically deregistered and scrapped, setting a precedent as the only state with such stringent regulations.

State-Level Incentives

A dozen states provide a 25 per cent rebate on road tax for registering a new private vehicle after scrapping an old one. Karnataka offers a fixed rebate in road tax based on the new vehicle's price, such as Rs 50,000 for vehicles costing over Rs 20 lakh. Uttarakhand provides a 25 per cent concession or Rs 50,000, whichever is lower, for private vehicles. Puducherry offers a 25 per cent discount or Rs 11,000, whichever is lower, for private vehicles. Haryana provides a 10 per cent rebate or a lower amount equal to 50 per cent of the scrap value for private vehicles.

In addition to tax incentives, vehicle owners who participate in the scrappage program receive a scrap value equivalent to 4-6 per cent of the ex-showroom price of the new vehicle they purchase.

These measures aim to facilitate a smoother transition towards newer, more efficient vehicles while significantly reducing environmental impact.

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