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Vehicle Scrappage Policy in India: RTO Rules, Benefits, Highlights

Written by Amit Jain
Updated On Oct 27, 20232 min read

Vehicle Scrappage Policy in India: Meaning and Benefits

The goal of the Vehicle Scrappage Policy, 2021 is to phase out outdated and unusable automobiles. It has been created for the de-registration of private automobiles and commercial vehicles that are more than 15 years old. To understand the RTO rules for scrapping vehicles, keep reading! 

What is India's policy on vehicle scrappage?

A government-funded initiative known as the Vehicle Scrappage Policy aims to replace outdated and unsafe automobiles on Indian roads with new, contemporary models. The policy's main objective is to establish a framework for the gradual replacement of unsafe and polluting automobiles, thereby reducing the nation's carbon footprint.

Heavy Commercial Vehicles (HCVs) will only be subject to fitness testing via Automated Testing Stations (ATSs) as of April 1, 2023. Starting on June 1, 2024, fitness testing for other categories of Commercial Vehicles (CVs) and Private Vehicles (PVs) will also be carried out via the ATS.

If they don't pass the fitness test, private and commercial vehicles that are more than 15 or 20 years old, respectively, would be scrapped. A vehicle is classified as an ELV (End-of-Life Vehicle) if it fails the fitness test.

Vehicle Scrappage Policy in India: RTO Rules, Benefits, Highlights

Highlights of the Announcement of the Vehicle Scrappage Policy

Since the second part of 2019, there has been unrest in the Indian auto industry. The COVID-19 pandemic that followed exacerbated the problem. 2020's post-Diwali sales have helped the industry somewhat, but things are still concerning. It is stated that the scrappage policy benefits India's faltering auto industry. There will be a need for new cars as older ones are phased out. The environment will also gain from the scrapping of obsolete cars.

A summary of the announcement of the Vehicle Scrappage Policy is provided below.

  1. The goal of the policy is to create a framework for India to dispose of obsolete cars.
  2. The actual scrapping procedure will be governed by RTO rules for scrapping two wheeler and regulations that will be outlined in the MoRTH statement.
  3. Owners of vehicles will receive advantages for disposing of their outdated cars.
  4. Reducing air pollution will be greatly aided by the removal of unsafe automobiles (depending on the location).
  5. Purchasing safe, cutting-edge, and environmentally friendly cars will excite people.

What is the objective of the 2021 Vehicle Scrappage Policy?

The Vehicle Scrappage Policy 2021's (also sometimes called the two wheeler scrap policy) primary goal is to locate and dispose of outdated, unusable, and environmentally harmful automobiles. These are some important lessons to be learned from the two wheeler scrappage programme.

  1. Eliminate pollution by discarding automobiles that lack proper registration and fitness.
  2. Boost traffic, passenger, and vehicle safety.
  3. Provide jobs in the automotive sector.
  4. formally establish the current unregulated two wheeler scrappage market.
  5. Boost fuel economy and save two wheeler owners' maintenance expenses.
  6. Boost the supply of affordable raw materials for the steel, electronics, and automobile industries.


Tentative timeline

Rules for testing the fitness of vehicles

October 1, 2021

Scrappage of Public Sector Undertaking (PSU) and government vehicles over 15 years old

April 1, 2022

Fitness testing of HCVs

April 1, 2023

Fitness testing of other CVs and PVs

June 1, 2024

Advantages of the Policy for Vehicle Scrappage

The following is a list of possible advantages of the new two wheeler scrap policy for the auto industry, economy, two wheeler owners, and other stakeholders:

  1. Air quality will improve and air pollution will decrease as obsolete cars are scrapped.
  2. As more and more old cars are trashed, there will be a greater need for new ones to replace the old ones. Over 51 lakh light-duty automobiles, both private and commercial, are older than 20 years. 
  3. Overall, the new scrappage policy will help the automotive industry by creating more work possibilities. For instance, scrap yards for new cars will require labour.
  4. Comparatively speaking, new, sophisticated cars will be safer. For instance, greater safety measures are standard in new cars.
  5. Additionally, the recycling sector will operate more actively, generating more income.
  6. Owners of vehicles may be able to scrap their old cars for tax incentives.
  7. Owners of vehicles may also receive the best bike scrap price for items that are still functional, including tyres.

On Indian roadways, a variety of vehicles are driven. The same guidelines cannot be applied to every two wheeler because of this diversity. Consequently, it is necessary to classify cars in relation to scrappage. These are the particulars.

1) Government vehicles

In January 2021, the government automobile scrappage policy was authorised. Vehicles owned by the federal government and state governments that are older than 15 years will be demolished in accordance with this approval. Next year, a policy of that kind will be implemented. The first day of April 2022, is when this policy went into effect.

2) Commercial Vehicles

Commercial vehicles are defined as those that are employed for transportation or other commercial uses. The commercial vehicle will need to pass a fitness test once 15 years have passed. The two wheeler will be scrapped in accordance with the commercial vehicle scrap policy guidelines if it is deemed unfit.

3) Private Vehicles

Private automobiles are those that people use to get from one place to another. A private vehicle fitness test has a 15-year-old minimum age requirement.

4) Vintage Automobiles

Generally speaking, vintage automobiles and motorcycles are older than the typical vehicles on the road. They are, nevertheless, well-maintained and driven less frequently. As a result, this is a different category, and regulations on scrapping these cars will take their nature into account.

Examination of Vehicle Fitness

The following are the main components of an old two wheeler fitness test as per the Vehicle Scrappage Policy 2021:

  • A thorough inspection is part of the fitness testing process, which establishes the vehicle's roadworthiness.
  • The examination also establishes whether the two wheeler is causing pollutants in the environment.
  • Just as you must use the Pollution Under Control test to determine your car's emission levels, you must also use authorised Automated Testing Stations to determine your car's suitability.
  • The vehicle must have another fitness test performed after the initial five-year validity of the test has expired.
  • If a two wheeler doesn't pass the fitness test, its registration cannot be renewed.
  • Older vehicles that pass the fitness test may be subject to a green cess of 10 to 15% of road tax. It could differ depending on the place.
  • Owners of automobiles who are found to be unfit may choose to scrap them. To pass the fitness test, they do, however, also have the option to fix it.

Where should I have the two wheeler tested or disposed off?

Here are some crucial considerations to make if the registration on your two wheeler is about to expire:

  1. To keep the car, go to the authorised Automated Testing Station (ATS).
  2. If you choose to scrap the car, go to the closest approved scrap yard.
  3. You must wait till the ATSs are running if you plan to get rid of your car. It is anticipated that they will be available via the VAHAN database.

What are the rewards for disposing of old cars?

These are the benefits of scrapping vintage cars.

  1. Take advantage of a discount: The owner may be eligible for a 4–6% reduction on the price of the new two wheeler (ex-showroom) after destroying the old one.
  2. No registration fees: The new vehicle's registration fees are waived upon declaring the Certificate of Deposit.
  3. Road tax concession: State governments may grant a new two wheeler owner a road tax concession. For non-transport cars, the concession can reach 25%, and for transport vehicles, it can reach 15%.
  4. Discount on a new car: It has been proposed that two wheeler manufacturers provide a five percent discount when buying a new two wheeler using the Certificate of Deposit. This reduction is in addition to the amount you are paid for your car's scrap value.

What are the drawbacks of owning an outdated car?

The following are the drawbacks of having an outdated car:

  1. Increased fees: Commercial vehicles that are over 15 years old are subject to additional fees for both the fitness test and the issuance of a Fitness Certificate (FC).
  2. Increased re-registration fees: The cost to renew the RC for a private two wheeler that is over 15 years old is greater.
  3. Green Cess: For such older vehicles, there will be an additional 10 to 15% green cess on top of the road tax.

Fee for renewing vehicle registration

The following pricing structure applies to private automobiles that are over 15 years old when their registration needs to be renewed:


Vehicle category

Current fee structure

Revised fee structure

Renewal or issuance of Registration Certificate (RC)

Light Motor Vehicle (LMV) - non-transport

Rs. 600 (New registration and renewal)

Rs. 600 (New registration), Rs. 5,000 (Renewal of RC after 15 years)

Fitness test for issuance of new or renewal of Fitness Certificate (FC) - Vehicles older than 15 years

Light Motor Vehicle (LMV) - non-transport

Rs. 600

Rs. 1,000 (Automated Testing Station)

Wondering about the 20 year old vehicle scrap policy? Here is the fee structure for the renewal of vehicle registration charges for commercial vehicles over 15 years old:

Fitness test (vehicles over 15 years old)

Vehicle category

Current fee structure

Revised fee structure


Rs. 600

Rs. 1,000 (Automated Testing Facility)

Passenger Vehicle/Medium Goods

Rs. 1,000

Rs. 1,300 (Automated Testing Facility)

Passenger Vehicle/Heavy Goods

Rs. 1,000

Rs. 1,500 (Automated Testing Facility)

Issuance or renewal of RC (vehicles over 15 years old)

Vehicle category

Current fee structure

Revised fee structure


Rs. 200

Rs. 7,500

Passenger Vehicle/Medium Goods

Rs. 200

Rs. 10,000

Passenger Vehicles/Heavy Goods

Rs. 200

Rs. 12,500

What circumstances make my two wheeler eligible for scrapping?

The nation's carbon footprint is increased by outdated, unsuitable, and polluting automobiles. According to the new Vehicle Scrappage Policy 2021, there are a few laws and regulations that make it easier to scrap older vehicles or renew registration in order to formalise the vehicle scrapping facility in India. These requirements must be met in order to be eligible to scrap an old car.

  1. Vehicles over 15 years old, both private and commercial, must pass an exam to be eligible for registration renewal.
  2. The owner may choose to fix the two wheeler and reapply for a test if it is determined to be unfit.
  3. The two wheeler will be deemed an End-of-Life Vehicle (ELV) and be qualified for scrapping if it doesn't pass the fitness test.

What effects does the policy have on you as a rider of two wheels?

This is how the bike scrap policy affects the owner of a two-wheeler:

  1. Required fitness test: For drivers of two-wheelers older than fifteen, a fitness test is required. The bike will be examined to ensure its fitness. Owners may request a retest and have their bike fixed if it is deemed unfit. The two-wheeler will be classified as an ELV and be qualified for scrapping if it is found to be unfit.
  2. Automated fitness test: At the moment, assessments are carried out by hand. But now that the Vehicle Scrappage Policy has been implemented, the two wheeler will have to undergo an exact automated fitness test with no human involvement.
  3. End-of-life Vehicle (ELV) certificate: The ATS issues an ELV certificate if your two-wheeler is considered unfit after it fails the computerised fitness test. You are unable to cover your bike with the required Third-party Bike Insurance since the vehicle is not roadworthy. Check the vehicle life in India at your nearest RTO.

How to scrap your bike?

Wondering how to scrap a bike? This is the procedure for scrapping bikes in India:

Step 1: Get in touch with the salvage yard

  1. Make contact with the approved recycler via phone or online.
  2. After scheduling an appointment, you can drive the vehicle to the salvage yard or ask them to come pick it up from your home. If you would like them to come get your car, kindly be aware that there can be towing fees.

Step 2: Finish the paperwork

  1. A duplicate of the two wheeler owner's Permanent Account Number. 
  2. original vehicle registration certificate.
  3. certificate for end-of-life vehicles from the automated testing station.
  4. Cancelled check.
  5. If the two wheeler owner is unavailable to turn the vehicle in at the automated testing station, a stamped letter of authorization for the designated individual should be provided.
  6. Identity documentation from the authorised individual (validate voter cards, passports, driver's licence, Aadhaar, or photo identity cards from the Central or State governments).
  7. Provide evidence of the vehicle owner, such as a landline phone bill, water bill, gas pipeline bill, electricity bill, etc.
  8. A digital image of the owner of the two wheeler or an approved representative holding the ELV.
  9. an agreement from the car's owner certifying that all the information provided is accurate and true to the best of their knowledge.

Step 3: Initiate the scrappage process

  1. The recycler usually removes the battery, tyres, and any applicable CNG kit. After being emptied, the air conditioner's refrigerant is delivered to the de-pollution station. Every liquid, including coolant for the engine, brake fluid, steering fluid, gearbox oil, gasoline, windscreen washer fluid and engine oil, is also drained. The vehicle's fuel tank and exhaust system are removed by the recycler.
  2. The body panels, boot lid, bonnet, fenders, doors, headlights, and bumpers are physically removed when the vehicle's fluids have been completely drained. The dashboard, roof lining, seats, floor mats, steering wheel, and other interior parts are then physically removed. The car's wiring system is likewise taken out. 
  3. The two wheeler is lifted and its running gear, brakes, and suspension are removed at the following stage. Ultimately, the plate bearing the vehicle's identification number is removed. 

Step 4: The vehicle's remaining component is recycled or put to another use.

  1. All the two wheeler parts have been removed, leaving only the body shell.
  2. A crane raises the car's body shell, which is then put into a crushing machine. A steel bale intended for smelting is what emerges from the crusher.
  3. The remaining components will be scrapped or sold, and they will be placed in a steel bale.
  4. To prevent environmental contamination, the recycler makes sure that no oil or AC gases are released into the atmosphere or onto land.

Step 5: Obtain the scrappage certificate.

  1. The recycler will provide a "certificate of destruction" once the two wheeler has been scrapped.
  2. The certificate is good at the relevant Regional Transport Office (RTO) for de-registration of the vehicle. You will receive payment for the scrap value either digitally or by cheque.

In addition to being used for the de-registration procedure, the certificate can be used to receive a discount on the next automobile you buy from the manufacturer. It can also be used to waive all registration fees and receive a road tax discount.

Owning Outdated Vehicles Will Be Expensive!

Vehicle owners are anticipated to be discouraged from keeping their vehicles due to the total cost of renewing an outdated vehicle and the required Fitness Test at the time of re-registration. In contrast, junking the two wheeler seems like a practical way to say goodbye. Furthermore, future increases to a few fees are anticipated. Periodic fee increases are possible in light of inflation.

These are the expenses you will have if your own vehicle is older than fifteen years.

  1. The test fee for fitness
  2. The cost of reactivating an account
  3. Green Drop
  4. Traffic levy

RTO regulations for India's auto salvage industry

The RTO guidelines for two wheeler recycling in India are listed below.

  1. The owner of the vehicle must notify the relevant RTO in writing about scrapping the vehicle.
  2. An affidavit from the car's owner must be submitted, attesting to the fact that there are no outstanding court proceedings, insurance claims, bank loans, or traffic violations against the vehicle. It should also be stated in the statement that no thefts involving the two wheeler occurred.
  3. Original vehicle documentation must be turned in by the owner, and the VIN is removed when the two wheeler is scrapped. The VIN plate and the supporting paperwork will be retained by the RTO for future use.
  4. It is necessary to submit the demolished vehicle's photos to the RTO along with a letterhead certification from the scrap yard or facility that includes the entire address.

RTO regulations for old two wheeler de-registration and destruction

To deregister older cars, the owner must abide by the RTO regulations listed below.

  1. Notify the appropriate RTO that the old two wheeler is being scrapped.
  2. Give up the registration certificate for the two wheeler and the chassis number plate that was taken off when it was scrapped.
  3. Send in the confirmation document that the two wheeler scrap merchant sent you.
  4. Together with the application for the vehicle's deregistration, submit an affidavit.
  5. The vehicle must not be the subject of a debt, insurance claim, or other legal proceedings, according to the document.
  6. The National Crime Records Bureau and traffic police will provide diligence reports, which the RTO will check.
  7. Regarding the car's sale, the RTO is required to confirm the vehicle records kept in its database.
  8. The RTO will proceed with the deregistration of the old vehicle if the documentation is deemed satisfactory.

What impact does automobile scrapping have on insurance?

Reusing an outdated and unsuited two wheeler has a good environmental benefit. Insurance is affected by scrapping an old two wheeler in addition to the environment. When you buy a new car, you might be eligible for a discount, which lowers the cost of insurance. Additionally if you don’t scrap your car you might be ineligible for insurance and hence you might be roaming around with significant chances of getting affected by challans.


  1. What is the two-wheeler scrapping policy in India?

   Answer: The two-wheeler scrapping policy in India is a governmental initiative aimed at phasing out old, polluting vehicles from the roads. Under this policy, incentives are provided to owners who voluntarily scrap their old two-wheelers and opt to purchase new, more environmentally-friendly ones.

  1. What are the eligibility criteria for a two-wheeler to be scrapped?

   Answer: The eligibility primarily depends on the age of the vehicle. Typically, two-wheelers that are more than 15 years old and fail to meet the current emission norms and fitness criteria are eligible for scrapping under the policy.

  1. What RTO rules apply to the scrapping of two-wheelers?

   Answer: RTO rules require the de-registration of the scrapped two-wheeler. The owner must surrender the vehicle registration certificate to the respective RTO, and necessary endorsements will be made, confirming the vehicle has been scrapped.

  1. How does the scrapping process work?

   Answer: Owners of eligible two-wheelers must approach authorised scrapping centres where the vehicle will be dismantled in an environmentally friendly manner. Certificates of scrapping will then be issued, which can be used to avail incentives when purchasing a new vehicle.

  1. What benefits are available under the scrapping policy?

   Answer: Benefits may include waivers on registration fees for new vehicles, discounts on new purchases, and potential road tax concessions. The specifics may vary and should be confirmed based on the prevailing policy guidelines.

  1. Where can I scrap my two-wheeler?

   Answer: Two-wheelers should be scrapped at authorised scrapping centres or facilities that comply with environmental regulations and are recognised by the government.

  1. Will scrapping my old two-wheeler affect my insurance?

   Answer: Yes, insurance policies linked to the scrapped vehicle will be terminated. For a new vehicle purchased post-scrapping, a fresh insurance policy will be required.

  1. Is the scrapping policy mandatory for old two-wheelers?

   Answer: The policy primarily focuses on voluntary participation, encouraging owners to scrap old vehicles to avail benefits and promote environmental sustainability.

  1. Can the components of my scrapped two-wheeler be sold?

   Answer: Authorised scrapping centres typically handle the dismantling and disposal of vehicle parts according to environmental regulations, and the sale of parts should comply with legal and environmental guidelines.

  1. How does the two-wheeler scrapping policy benefit the environment?

   Answer: By encouraging the removal of older, more polluting vehicles from the roads, the policy helps reduce air pollution and promotes the use of newer, more fuel-efficient, and environmentally friendly two-wheelers.


This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
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Written by Amit Jain
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 Amit is an upcoming name in the motor industry be it new cars/ bikes or used ones. Amit in his last stint worked as a consultant for major Fortune 500 companies across the globe. In his free time, Amit likes to play cricket.

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