Car Scrap Policy in India
India’s automotive sector is undergoing a major transformation thanks to the Car Scrap Policy. With millions of old, polluting vehicles still on the roads, the government has rolled out this policy to encourage voluntary scrapping of vehicles that are older than 15-20 years. But what does it mean for your old car? Can you still drive it? Or should you scrap it?
This blog explains the Car Scrap Policy in India, its rules, processes, incentives, and whether it makes sense to keep or scrap your car after 15 years.
Table of Contents
What Is the Car Scrap Policy in India?
The Car Scrap Policy, officially known as the Vehicle Scrappage Policy, was announced in 2021 and is a structured plan to remove unfit vehicles from Indian roads.
🔑 Key Definition:
“The Car Scrap Policy is a government initiative that mandates the voluntary scrapping of personal vehicles older than 20 years and commercial vehicles older than 15 years, if they fail the fitness test.”
Why Was the Vehicle Scrappage Policy Introduced?
The primary goals of the car scrap policy in India include:
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Reducing air pollution caused by old, poorly maintained vehicles.
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Improving road safety.
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Promoting eco-friendly automobile technology.
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Boosting the automobile recycling industry.
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Encouraging purchase of new, fuel-efficient vehicles.
Key Highlights of India’s Car Scrap Policy
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Voluntary but Encouraged: Not mandatory for all, but enforced based on fitness.
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Fitness Test Mandated: Personal vehicles must pass a test after 15 years.
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Automatic Deregistration: Failure in test = deregistration and scrapping.
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Certified Scrapping Centers: Vehicles must be scrapped at registered centers.
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Scrapping Certificate: Owners receive a certificate that offers incentives on new vehicle purchases.
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Green Tax: Extra charge on re-registration of old vehicles.
What Happens to a Car After 15 Years?
After 15 years, your car is considered “end-of-life” unless it is proven roadworthy.
Your options:
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Renew RC after fitness test (valid for 5 years).
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Fail the fitness test? Vehicle must be scrapped.
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Skip the test? The vehicle becomes illegal on public roads.
Can You Still Use a Car After 15 Years?
Yes, under the Car Scrap Policy, a car older than 15 years can still be used if:
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It passes the fitness test at an authorized inspection center.
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You renew the Registration Certificate (RC).
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The car complies with emission and safety norms.
However, in places like Delhi-NCR, petrol cars older than 15 years and diesel cars older than 10 years are completely banned.
RC Renewal and Fitness Test Rules
How to Renew RC After 15 Years:
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Fill Form 25 at the RTO.
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Pay the RC renewal fee.
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Submit your car for a fitness test.
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If passed, RC is renewed for 5 years.
Vehicle Fitness Test Includes:
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Brake efficiency check.
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Emission test.
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Structural safety.
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Lighting & signaling systems.
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Engine health.
Failure means the car is unfit and must be scrapped.
Who Must Scrap Their Car?
Scrapping is compulsory if:
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Your car fails the fitness test.
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You do not renew the RC.
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Your car is a diesel vehicle older than 10 years in NCR.
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You receive a government notice for deregistration.
How to Scrap a Car Legally in India
Follow these steps to scrap your car legally under the Car Scrap Policy in India:
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Contact an authorized scrapping center listed by your state RTO.
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Submit documents: RC, insurance, ID proof.
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Get vehicle inspection done.
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Receive Certificate of Vehicle Scrapping (CVSC).
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Submit CVSC at the RTO for deregistration.
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Receive incentives from car dealers if you buy a new vehicle.
Where Can You Scrap a Car in India?
The Ministry of Road Transport & Highways has listed authorized vehicle scrapping facilities (AVSFs) in major cities and states.
You can also check online platforms like:
- A S Traders – Scrap Dealers in India
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Maruti Suzuki Toyotsu Scrappage Centers
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CERO (Mahindra MSTC)
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Local government-approved recyclers
These centers are equipped with eco-friendly dismantling processes.
Can You Sell a Car After 15 Years?
Yes, but it gets complicated:
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If your car is older than 15 years and has no valid RC, it can’t be sold legally.
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You may sell it for scrap value.
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In rare cases, classic or vintage cars are exempted.
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You must transfer ownership officially to avoid future legal hassles.
Benefits of the Car Scrap Policy
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✅ Incentives: 4-6% of vehicle’s price as a scrappage incentive.
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✅ GST discount on new car purchases.
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✅ Zero registration fee for the new vehicle (with scrappage certificate).
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✅ Cleaner roads and lower emissions.
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✅ Boost to the automobile & recycling industry.
Drawbacks and Criticism of the Policy
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❌ Burden on middle-class car owners.
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❌ High cost of buying new cars, even after incentives.
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❌ Inconsistent implementation across states.
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❌ Confusion over diesel bans and commercial vehicle timelines.
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❌ Shortage of certified scrapping centers in Tier 2/3 cities.
Car Scrap Value and Incentives
The scrap value of your car depends on:
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Vehicle weight (steel, aluminum parts).
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Current scrap metal rates.
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State-wise government schemes.
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Incentives from OEMs (like Maruti, Tata).
📊 Rough Estimate:
| Vehicle Type | Approx Scrap Value (INR) |
|---|---|
| Hatchback | ₹15,000 – ₹25,000 |
| Sedan | ₹20,000 – ₹35,000 |
| SUV/MPV | ₹30,000 – ₹50,000 |
| Commercial Vehicle | ₹40,000 – ₹80,000 |
Should You Scrap or Renew Your Old Car?
Scrap If:
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Your car fails fitness test.
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It’s over 15 years (10 for diesel) in Delhi-NCR.
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Repair and fuel costs are too high.
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You’re upgrading to a new vehicle.
Renew If:
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The car passes fitness tests.
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You’ve taken good care of it.
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You’re not in a restricted zone (e.g., Delhi).
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You want to keep it as a second car or collector’s item.
Incentives Offered Under India’s Vehicle Scrappage Policy
One of the major highlights of the car scrap policy in India is the set of government incentives designed to encourage vehicle owners to voluntarily scrap their old cars. These incentives are aimed at reducing pollution, improving road safety, and accelerating the adoption of newer, fuel-efficient vehicles.
Key Benefits Under the Scrappage Policy:
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Manufacturer Discount
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Up to 5% discount on the purchase of a new vehicle when you present a Certificate of Vehicle Scrapping (CVSC).
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This discount is offered by car manufacturers as part of their participation in the government’s initiative.
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Road Tax Rebate
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State governments may offer a road tax rebate of 15% to 25% for private and commercial vehicles purchased using a scrappage certificate.
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Registration Fee Waiver
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Vehicle owners are exempted from paying registration fees for a new car purchased after scrapping their old vehicle under the policy.
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Scrap Value Payment
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The scrap value of the old vehicle (typically 4–6% of the ex-showroom price) is paid to the owner directly by the Authorized Vehicle Scrapping Facility (AVSF).
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📊 Example Calculation:
Let’s say your old car is worth ₹8 lakhs (ex-showroom price of new car):
| Incentive Type | Estimated Benefit (₹) |
|---|---|
| 5% Manufacturer Discount | ₹40,000 |
| 15% Road Tax Rebate | ₹60,000 (approx.) |
| Registration Fee Waiver | ₹6,000–₹10,000 |
| Scrap Value (5%) | ₹40,000 |
| Total Savings | ₹1.5 Lakhs+ |
These savings make a strong financial case for retiring old vehicles under the car scrap policy in India.
Step-by-Step Process to Get a Car Scrapping Certificate in India
If you’re planning to scrap your car under the vehicle scrappage policy, the most important document you’ll need is the Certificate of Vehicle Scrapping (CVSC). This certificate not only validates that your car was scrapped legally but also unlocks access to government incentives and tax waivers.
What Is a Scrapping Certificate?
A scrapping certificate is an official document issued by a government-approved Authorized Vehicle Scrapping Facility (AVSF) after your vehicle is dismantled and recycled.
📝 Step-by-Step Process:
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Choose an Authorized Vehicle Scrapping Facility
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Only use an AVSF listed by your state transport department (e.g., CERO, Maruti Suzuki Toyotsu).
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Submit Required Documents
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Original RC
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Owner’s ID proof
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Insurance (if applicable)
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PAN or Aadhaar card
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Vehicle Inspection & Approval
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The AVSF will verify the vehicle details, condition, and registration status.
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Dismantling & Recycling
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Once verified, the vehicle is dismantled following eco-friendly methods.
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Receive the Scrapping Certificate (CVSC)
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You’ll receive a digital or physical certificate, which is mandatory to claim discounts or register a new car.
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Use CVSC for New Vehicle Benefits
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Submit the certificate to the car dealership or RTO during your new vehicle registration to avail tax rebates and registration fee waivers.
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What is an AVSF and Why It Matters in Car Scrapping
An Authorized Vehicle Scrapping Facility (AVSF) is a government-approved center for the eco-friendly dismantling and recycling of old, unfit vehicles. Under India’s car scrap policy, only AVSFs are allowed to issue valid scrappage certificates and carry out scrapping operations legally.
Why AVSFs Are Important:
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They ensure safe dismantling and recycling of vehicles.
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Prevent illegal resale of parts or chassis.
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Ensure full compliance with MoRTH guidelines.
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Only AVSFs can issue the Certificate of Vehicle Scrapping, which is mandatory to claim new car incentives.
Debunking Myths Around Vehicle Scrapping in India
As the car scrap policy rolls out across India, confusion and misinformation continue to circulate. Let’s clear up some of the most common myths about vehicle scrapping and set the record straight.
❌ Myth 1: Scrapping is Mandatory for All Cars Over 15 Years
Fact:
Scrapping is not mandatory for private cars after 15 years—unless they fail the fitness test or are banned under local pollution control laws (e.g., diesel vehicles in Delhi NCR after 10 years).
❌ Myth 2: You Can’t Sell a Car If It’s Over 15 Years Old
Fact:
You can sell a 15+ year-old car if it has a valid Registration Certificate and passes the fitness test. However, buyers may be fewer, and local restrictions may apply.
❌ Myth 3: Any Scrap Dealer Can Scrap Your Car
Fact:
Only a government-authorized AVSF can legally scrap your vehicle and issue the Certificate of Vehicle Scrapping (CVSC) required to claim incentives and cancel RC legally.
❌ Myth 4: Scrapping is a Loss-Making Deal
Fact:
With proper documentation and scrapping through authorized channels, you can recover ₹50,000–₹1.5 lakhs in benefits, making scrapping a smart financial decision in many cases.
How A S Traders Will Help You on Your Car Scrapping Journey
If you’re planning to scrap your car in line with the Car Scrap Policy in India, We are your trusted partner in Hyderabad to make the process smooth, legal, and rewarding.
At A S Traders – Scrap Buyer in Hyderabad, we specialize in hassle-free, transparent scrap services tailored to car owners just like you.
Here’s How We Supports You:
✅Free Scrap Pickup at Your Doorstep
We offer free vehicle pickup services across Hyderabad, so you don’t have to worry about transporting your old car to the scrapyard.
✅ Instant Cash for Scrap Cars
Our experts evaluate your car’s scrap value on the spot and ensure you get the best possible price based on current metal rates and vehicle condition.
✅ Authorized & Legal Process
We follow the government’s scrappage guidelines strictly. You’ll receive:
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A Certificate of Vehicle Scrapping (CVSC)
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Assistance with RC cancellation
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Help in transferring or closing ownership legally
✅ Support With Documentation
Not sure what forms or steps are involved? Our team will guide you through:
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RTO formalities
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Deregistration
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Pollution and tax compliance
We take care of the paperwork so you don’t have to!
✅ Eco-Friendly Dismantling
Your vehicle will be processed at environmentally responsible facilities, ensuring proper recycling of parts, battery disposal, fluids, and metals.
✅ Incentives Guidance
With the scrappage certificate we provide, we’ll also help you:
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Claim GST discounts
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Get rebates from car dealerships
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Benefit from RC waiver fees (if applicable)
Why Choose A S Traders?
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20+ years of experience in the scrap and recycling industry
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Fully licensed and RTO-compliant
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Trusted by thousands of vehicle owners in Hyderabad
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Quick, courteous, and zero-hassle service
📞 Call us now or visit www.scrapbuyershyderabad.com
to start your legal and profitable car scrapping journey today. We’ll make sure your vehicle is scrapped the right way — safely, legally, and with maximum benefit to you.
Conclusion
The Car Scrap Policy in India is a game-changer, especially in urban centers where pollution is a major concern. While it brings challenges for owners of old vehicles, it also opens the door to safer roads, cleaner air, and a stronger auto ecosystem. If your car is over 15 years old, it’s time to decide – scrap it for incentives or renew it for another run on the roads. Either way, make sure you’re compliant with the law.