Explained | How to scrap your end-of-life vehicle in eco-friendly way
The government of India introduced the vehicle scrapping policy in 2021 to phase out old vehicles, as they cause pollution and are considered unfit to ply. Each new model is expected to be more operationally efficient and less polluting than older models. Hence, phasing out older vehicles would, in a way, apply the brakes on the increase in vehicular pollution.
When will the vehicle need to be scrapped
Commercial vehicles undergo a fitness test every year when their registration has to be renewed. If a vehicle fails the test, it will have to be scrapped. Private vehicles have to go for re-registration when they are 15 years old, for which they have to take a fitness test at an RTO.
Going forward, you can do this fitness test at an authorised Automated Testing Station that operates under the guidelines of the Ministry of Road Transport and Highways. If your personal vehicle clears the fitness test, you can use it for another five years after re-registering at the RTO by paying the relevant tax. Registration has to be renewed every five years.
How scrap dealers purchase the vehicle
If your vehicle fails the fitness test, it will have to be scrapped. As of now, you would go to one of the vehicle scrap dealers in your city. The dealer would purchase the vehicle at a price that would be determined by two factors: one, the weight of the metal, and two, the quality of the parts.
For calculating the portion of price accounted by the metal, the scrap dealer would divide the weight of the vehicle by two (it would vary with each scrap dealer and city or State) to account for the non-ferrous material. So, if your car weighs 1,000 kg, the scrap dealer would pay the prevailing rate for 500 kg of iron scrap.
The price assigned to the quality of usable parts would be at the discretion of the scrap dealer.
The price would vary with each model. For example, the parts of the popular Swift model would yield less than that of the Ford Ikon. The reason is that the Ikon is no longer available. An Ikon owner would be ready to pay a premium for a replacement part. In comparison, parts of a Swift are relatively more easily available.
What does scrap dealer do with your vehicle
Once you hand over your vehicle to your neighbourhood scrap dealer and take the money, you have no idea what the scrap dealer will do with the car. Ideally, the scrap dealer would sell the metal and try to get the best price for the usable parts.
But, the dealer might even re-sell the car without your knowledge. You might come to know if and when the car comes to the attention of the police, say for ignoring a signal following an accident, or being used in a crime, or something like that.
How does vehicle scrappage policy make things better
The policy lays down the norms for setting up a Registered Vehicle Scrapping Facility, or RVSF, where your vehicle will be scrapped as per government norms and in an eco-friendly process. An RVSF is coming up in Bengaluru. It’s being set up by CERO, which is a joint venture of Mahindra Accelo and GoI-run MSTC. A separate RVSF is coming up at Koratagere in Tumakuru district and another in Koppal district of Karnataka.
Is authorised dealer costlier than neighbourhood scrap dealer?
Aniket Bag, founder of scrap dealer aggregator Scrapoto, estimates a difference in the range of 20%. “This is accounted for by the cost of capital invested and compliance with government-mandated eco-friendly methods of scrapping a vehicle.”
What are government-mandated methods of scrapping vehicle
The glass, plastic, tyres, oil, and grease must be disposed of in an eco-friendly manner. Wherever possible, parts of the scrapped vehicle should be re-cycled.
Why you should go to an RVSF
An RVSF will hand over a Certificate of Deposit (CoD) and a Certificate of Vehicle Scrapping (CVS). These certificates prove that you have complied with the legal requirements for an end-of-life vehicle.
Is 20% less price a good reason to go to an RVSF?
If your neighbourhood scrap dealer misuses your vehicle, you might also have to bear the consequences. The CoD can save you from the possibility of resale of the vehicle that you gave for scrapping and the resultant consequences, if any.
Any other reason to go to an RVSF?
The government is trying to come up with incentives that will make you accept the 20% lower price, like a discount on the road tax for your next vehicle. You get a discount equivalent to 25% of the road tax paid for the scrapped vehicle. The incentives vary with each State.
What if I do not intend to buy another vehicle?
The CoD is a tradable document. You can trade it with someone who wants to buy a new vehicle.
How many RVSF does India have?
64 (as on August 2023) of which 34 are operational.
Where can I find an RVSF?
State-wise RVSF list is available on Vahan portal
What if my vehicle was registered in a different State?
You can scrap the vehicle at the nearest RVSF and collect the CoD, using which you can claim benefits offered by the State in which your (scrapped) vehicle had been registered.
Do I need to inform RTO about scrapping my vehicle?
C. Mallikarjuna, Additional Commissioner for Transport, Karnataka, says, “Individuals can hand over end-of-life vehicles to RVSFs who will be authorised to apply to the RTO for de-registration. If the RTO does not respond within seven days, the application is deemed to be accepted. RVSF can proceed with scrapping the vehicle, after which they must hand over a Certificate of Vehicle Scrapping (CVS) to the owner.”
But, if you wish to, you can de-register your vehicle online on the Vahan portal before handing it over to your neighbourhood scrap dealer or an RVSF.
RVSFs may have their own processes
Mahindra Accelo Managing Director Sumit Issar says, “When customers call CERO, we encourage and guide them in de-registering their vehicle with the RTO before handing them over to us for scrapping. We have seen customers completing the de-registration process in 15 minutes. The time may vary with each customer, but the process is not very difficult.”
The government of India introduced the vehicle scrapping policy in 2021 to phase out old vehicles, as they cause pollution and are considered unfit to ply. Each new model is expected to be more operationally efficient and less polluting than older models. Hence, phasing out older vehicles would, in a way, apply the brakes on the increase in vehicular pollution.
When will the vehicle need to be scrapped
Commercial vehicles undergo a fitness test every year when their registration has to be renewed. If a vehicle fails the test, it will have to be scrapped. Private vehicles have to go for re-registration when they are 15 years old, for which they have to take a fitness test at an RTO.
Going forward, you can do this fitness test at an authorised Automated Testing Station that operates under the guidelines of the Ministry of Road Transport and Highways. If your personal vehicle clears the fitness test, you can use it for another five years after re-registering at the RTO by paying the relevant tax. Registration has to be renewed every five years.
How scrap dealers purchase the vehicle
If your vehicle fails the fitness test, it will have to be scrapped. As of now, you would go to one of the vehicle scrap dealers in your city. The dealer would purchase the vehicle at a price that would be determined by two factors: one, the weight of the metal, and two, the quality of the parts.
For calculating the portion of price accounted by the metal, the scrap dealer would divide the weight of the vehicle by two (it would vary with each scrap dealer and city or State) to account for the non-ferrous material. So, if your car weighs 1,000 kg, the scrap dealer would pay the prevailing rate for 500 kg of iron scrap.
The price assigned to the quality of usable parts would be at the discretion of the scrap dealer.
The price would vary with each model. For example, the parts of the popular Swift model would yield less than that of the Ford Ikon. The reason is that the Ikon is no longer available. An Ikon owner would be ready to pay a premium for a replacement part. In comparison, parts of a Swift are relatively more easily available.
What does scrap dealer do with your vehicle
Once you hand over your vehicle to your neighbourhood scrap dealer and take the money, you have no idea what the scrap dealer will do with the car. Ideally, the scrap dealer would sell the metal and try to get the best price for the usable parts.
But, the dealer might even re-sell the car without your knowledge. You might come to know if and when the car comes to the attention of the police, say for ignoring a signal following an accident, or being used in a crime, or something like that.
How does vehicle scrappage policy make things better
The policy lays down the norms for setting up a Registered Vehicle Scrapping Facility, or RVSF, where your vehicle will be scrapped as per government norms and in an eco-friendly process. An RVSF is coming up in Bengaluru. It’s being set up by CERO, which is a joint venture of Mahindra Accelo and GoI-run MSTC. A separate RVSF is coming up at Koratagere in Tumakuru district and another in Koppal district of Karnataka.
Is authorised dealer costlier than neighbourhood scrap dealer?
Aniket Bag, founder of scrap dealer aggregator Scrapoto, estimates a difference in the range of 20%. “This is accounted for by the cost of capital invested and compliance with government-mandated eco-friendly methods of scrapping a vehicle.”
What are government-mandated methods of scrapping vehicle
The glass, plastic, tyres, oil, and grease must be disposed of in an eco-friendly manner. Wherever possible, parts of the scrapped vehicle should be re-cycled.
Why you should go to an RVSF
An RVSF will hand over a Certificate of Deposit (CoD) and a Certificate of Vehicle Scrapping (CVS). These certificates prove that you have complied with the legal requirements for an end-of-life vehicle.
Is 20% less price a good reason to go to an RVSF?
If your neighbourhood scrap dealer misuses your vehicle, you might also have to bear the consequences. The CoD can save you from the possibility of resale of the vehicle that you gave for scrapping and the resultant consequences, if any.
Any other reason to go to an RVSF?
The government is trying to come up with incentives that will make you accept the 20% lower price, like a discount on the road tax for your next vehicle. You get a discount equivalent to 25% of the road tax paid for the scrapped vehicle. The incentives vary with each State.
What if I do not intend to buy another vehicle?
The CoD is a tradable document. You can trade it with someone who wants to buy a new vehicle.
How many RVSF does India have?
64 (as on August 2023) of which 34 are operational.
Where can I find an RVSF?
State-wise RVSF list is available on Vahan portal
What if my vehicle was registered in a different State?
You can scrap the vehicle at the nearest RVSF and collect the CoD, using which you can claim benefits offered by the State in which your (scrapped) vehicle had been registered.
Do I need to inform RTO about scrapping my vehicle?
C. Mallikarjuna, Additional Commissioner for Transport, Karnataka, says, “Individuals can hand over end-of-life vehicles to RVSFs who will be authorised to apply to the RTO for de-registration. If the RTO does not respond within seven days, the application is deemed to be accepted. RVSF can proceed with scrapping the vehicle, after which they must hand over a Certificate of Vehicle Scrapping (CVS) to the owner.”
But, if you wish to, you can de-register your vehicle online on the Vahan portal before handing it over to your neighbourhood scrap dealer or an RVSF.
RVSFs may have their own processes
Mahindra Accelo Managing Director Sumit Issar says, “When customers call CERO, we encourage and guide them in de-registering their vehicle with the RTO before handing them over to us for scrapping. We have seen customers completing the de-registration process in 15 minutes. The time may vary with each customer, but the process is not very difficult.”
