Advantage and Disadvantage of Owning an Old Vehicle According to New Scrap Policy
What is Vehicle Scrappage Policy in India?
The Vehicle Scrappage Policy is a government-funded program to scrap old and unfit vehicles and replace them with modern and new vehicles on Indian roads. The primary goal of the policy is to create an ecosystem for phasing out unfit and polluting vehicles to achieve a lower carbon footprint in the country.
Beginning April 1, 2023, fitness testing of Heavy Commercial Vehicles (HCVs) shall be conducted only through Automated Testing Stations (ATSs). For other types of Commercial Vehicles (CVs) and Private Vehicles (PVs), the fitness testing shall also be conducted through the ATS and begin on June 1, 2024.
Commercial vehicles and private vehicles older than 15 and 20 years, respectively, shall be scrapped if they fail the fitness test. If a vehicle fails the fitness test, it shall be defined as an ELV (End-of-Life Vehicle).
What are the Benefits of Vehicle Scrappage Policy 2021?
Now, let us take a look at the expected following benefits of the new scrappage policy:
(a) Scrapping unfit vehicles mean better air quality and less air pollution
(b) As the old vehicles will be scrapped, demand will be there for new vehicles
(c) With the car scrappage policy implemented, there will be job opportunities. For instance, manpower will be required for the scrapping of vehicles
(d) The vehicle owners might also avail tax benefits as an incentive when scrapping the old vehicle
(e)Industry of recycling will lead to high revenue
(f)The new vehicles will be safe in comparison to the old vehicles
Advantage for Scrapping Old Vehicles
The Ministry of Road Transport and Highways issued a list of incentives and disincentives pertaining to the Vehicle Scrapping Policy are given below-
Avail a discount: After scrapping the vehicle, the owner may receive a 4 to 6% discount on the new vehicle’s cost (ex-showroom).
No registration charges: Upon declaring the Certificate of Deposit, the registration fees for the new vehicle are waived.
Concession on road tax: State governments may offer a concession on the road tax on the new vehicle. The concession can be up to 25% for non-transport vehicles and 15% for transport vehicles.
Discount on a new vehicle: Vehicle manufacturers has been requested to offer a discount of 5% on purchasing a new vehicle against the Certificate of Deposit. This discount is over and above the scrap value, you receive for your vehicle.
Disadvantage of owning an old vehicle?
Here are the disadvantages of owning an old vehicle.
Higher fees: The charges for the fitness test and the grant of a Fitness Certificate (FC) for commercial vehicles that are more than 15 years old are higher.
Higher re-registration fees: For private vehicles that are more than 15 years old, the charges for the renewal of the RC are higher.
Green Cess: A green cess of 10 to 15% over and above the road tax shall be applicable for such older vehicles.
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