Keeping old cars under the new Vehicle Scrappage Policy will cost you dearly

Passenger vehicles older than 15 years and commercial vehicles older than 20 years would be scrapped without question if they fail the fitness test.

Registration Renewal Cost

Once a private vehicle is 15 years old or more, renewal of its registration would now cost you way more than it did earlier. For two-wheelers, price went up from Rs 300 to Rs 1,000 while it went up from Rs 600 to Rs 5000 for cars.

Fitness Certificates become pricey

The cost of getting a fitness certificate for commercial vehicles are 62 times of what it was while that to obtain one for private vehicles jumped up 8 times.

Certificates for vehicles that are 15 years old or more have now spiked from a nominal Rs 200 to a hefty amount of Rs 7,500 for cabs and Rs 12,500 for trucks.

Vehicles failing fitness test would automatically chucked out of the central

of vehicles, Vahan.

Green tax over road tax

Green tax can be levied separately for renewal of registration, over and above the already existing road tax that every vehicle owner already pays. Green tax could be anywhere between 10-25% of the annual road tax.

Grant Thornton Bharat in a report said that the policy will turn the Indian Automative industry around. From reducing pollution, generating demand for electric vehicles, to boosting employment, he calls the policy a win-win for various stakeholders.

Boon for other stakeholders

“One of the key opportunities that will emerge from the vehicle scrappage policy will be for the metal recycling business. It will also to an extent reduce the cost of production. Steel is a crucial component for automobile manufacturers, and its price has been growing up to almost 30 per cent in the last six months,” said Saket Mehra, Partner and Automotive Sector Leader, Grant Thornton Bharat.

The aforementioned changes in the regulations would disincentivise and Indian consumer to keep their old vehicle while it acts as a boon for the sectors of scrapping and metal production thereby reducing cost of production.