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An Introduction to Government's Vehicle Scrappage Policy

By Vikas Chandra Das
25 November 2022, 1:23 PM

A government-funded program for scrapping old and unfit vehicles and replacing them with modern and new ones is called the Vehicle Scrappage Policy. To lower the country's carbon footprint, the policy aims to create an ecosystem for phasing out unfit and polluting vehicles. The creation of this policy is similar to a bike insurance policy in India.

From April 1, 2023, only Automated Testing Stations (ATS) will be able to test the fitness of Heavy Commercial Vehicles (HCVs). As of June 1, 2024, fitness tests will also be conducted through the ATS for commercial vehicles (CVs) and private vehicles (PVs).

In the case of commercial and private vehicles that do not pass the fitness test, they should be scrapped. ELVs (End-of-Life Vehicles) are vehicles that do not pass the fitness test.

What is the Purpose of Launching a New Vehicle Scrappage Policy?

Recent years have seen an increase in the demand for two-wheelers. There is a 6% contribution to India's GDP from the two-wheeler sector. Most of the Indian automobile industry's production is consumed domestically, and the country is the world's 7th largest auto manufacturer. Automobile emissions significantly contribute to air pollution in India, a highly polluted nation.

Even sales of two-wheeler insurance have witnessed new records, with people flocking to buy bike insurance online to protect themselves and their families in times of mishaps. These two-wheeler insurance policies protect you in times of mishaps and assist you in servicing your vehicles. These bike insurance policies have also been mandated by the Motor Vehicles Act.

New vehicle scrappage policies aim to reduce air pollution by eliminating the use of old two-wheelers on the road. As well as contributing to air pollution, an old and unfit bike is more likely to cause mishaps, such as road accidents. The government introduced a new policy on vehicle scrappage for this reason.

A third-party bike insurance policy is essential for bike owners to protect themselves financially in the event of an unfortunate incident.

In addition to boosting the auto and metal industries, this new scrappage policy reduces automobile waste through steel recycling. Make sure you have comprehensive bike insurance with you too. As a result of abandoning old two-wheelers, new automobile models will also be sold at a higher rate. 

New Scrappage Policy: How Does It Work? 

Old two-wheelers must undergo a test to assess their fitness and durability under the Vehicle Scrappage Policy 2021. View the new policy's workings along with the mandatory tests that must be administered to every two-wheeler: 

1. Fitness Test- Under the new vehicle law, every two-wheeler aged 20 or older must undergo a fitness test. Commercial vehicles will have to undergo this fitness test after 15 years to renew their registration certificate for the next five years.

2. A Computerised Vehicle Fitness Test - Manual tests are conducted by an RTO-authorized person, but the mandatory tests will soon be computerised. A Public-Private Partnership model will be used to deliver this advanced fitness test service. No human intervention will occur during the computerised test so that the results will be accurate and reliable.

3. Mandatory End-of-Life Vehicle Certificate- Two-wheelers that fail their fitness test will be given an end-of-life certificate. As these vehicles are unfit and unroadworthy, no two-wheeler insurance companies will offer them a two-wheeler insurance policy. The scrapping of such vehicles will take place at a registered facility for scrapping vehicles. RTOs can, however, re-register two-wheelers after passing this test.

Policy on Vehicle Scrappage Incentives 

If you must scrap your two-wheeler because it fails the fitness test under the new vehicle scrappage policy, the following benefits are still available to you:

1. Scrapping Your Old Two-wheeler: Trade in your old and unfit bike for scrap metal at a registered vehicle scrapping facility centre. The value of scrapped bikes is determined by the weight of their materials, such as metal and plastic. 

2. New Two-wheeler Discount: You can purchase a new bike at a special discount under the new scrappage policy when you present your scrappage certificate. Scrapped vehicles can qualify for a special 5% discount under a policy proposed by the Ministry of Road Transport and Highways.

Two-wheelers can therefore be purchased for less money. You can also check with the best bike insurance company in India to find out if they offer discounts on a bike insurance policy for vehicle scrappage.

3. Vehicle Registration and Road Tax Discount: Residents whose two-wheelers have been scrapped can also get a discount on their vehicle registration and road tax under the new policy.

The government may rebate up to 25% of the road tax under the Vehicle Scrappage Policy 2021. Furthermore, the new bike now comes with completely free registration. Make sure you get motor insurance with the new vehicle.

Wrapping Up

Scrapping all old, unfit, and polluting vehicles is the goal of the new vehicle scrappage policy. A significant milestone in India's development journey has been reached with the implementation of the policy.

Furthermore, this will encourage all citizens to take a more responsible approach to the environment. Don't forget to buy a two-wheeler insurance policy if you want to replace your old bike with a new one.


1. How does the vehicle scrappage scheme work?

Following this 10- or 15-year expiration, the scrappage policy will take effect. A mandatory fitness test will then be required for the bike. When a commercial vehicle reaches eight years of age, it is required to renew its fitness certificate annually, similar to two wheeler insurance policy.

2. Who will benefit from the vehicle scrappage policy?

Old vehicles will need to be scrapped, increasing the demand for new vehicles. Among private and commercial light motor vehicles, more than 51 lakh are over 20 years old. As a result of the new scrappage policy, more job opportunities will be created for the vehicle industry.

3. Is vehicle scrappage policy mandatory?

Vehicle scrappage policies are already in place in many developed countries, helping to reduce vehicular emissions. The new auto scrappage policy requires scrapping old and unfit motor vehicles and receiving discounts on new bikes and bike insurance.

4. Can we use bikes after 15 years in India?

There is another scenario where you must re-register your vehicle in India if it is older than 15 years old. Over one year, your vehicle must be re-registered if you take it out of state.

5. Can we use a 20-year-old bike?

Every bike owner whose bike is older than 20 years will be required to take a fitness test. The bike does not have to be registered unless used for personal purposes. A fitness requirement will apply to people who have registered their vehicles for commercial use at the end of the first 15 years.

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