Car Scrapping Policy in India: What Vehicle Owners Should Know

What is the vehicle scrapping policy?

The Vehicle Scrapping Policy, announced in 2021, sets up Registered Vehicle Scrapping Facilities (RVSF) where old vehicles are dismantled in an environment-friendly way. Private vehicles older than 20 years and commercial vehicles older than 15 years must pass a fitness test; unfit vehicles are deregistered and scrapped.

What does the owner get for scrapping a car?

Owners receive a Certificate of Deposit when they hand over the vehicle to a registered scrapping facility. This certificate can be used for benefits on a new vehicle purchase — many states offer a road tax rebate of up to 25% for private vehicles, and manufacturers may add their own discounts. The scrap value of the car itself is paid separately, based on its weight and the current steel scrap rate.

How is a car's scrap value decided?

A typical hatchback yields 700–900 kg of scrap, mostly steel with smaller amounts of aluminium, copper wiring, and plastics. The steel portion is priced at the going iron scrap rate or steel rate, while aluminium parts fetch the aluminium scrap rate. Use the scrap value calculator with the steel rate to get a rough figure before visiting a scrapping facility.

Where can you scrap a vehicle?

Only Registered Vehicle Scrapping Facilities can issue the Certificate of Deposit. The Ministry of Road Transport maintains the list of registered facilities state-wise. Avoid unregistered yards — they cannot issue the certificate, and the vehicle stays in your name in the records.