Car Scrappage Policy Updated in India – August 2025 Benefits & Rules

Car Scrappage Policy India 2025 has undergone a major revamp this August, bringing relief and financial benefits to vehicle owners with outdated and polluting cars. The government’s newly updated guidelines under the old vehicle disposal scheme now provide better cash incentives, faster vehicle deregistration, and tax benefits for scrapping old cars and commercial vehicles across India.

This updated India car policy aims to eliminate vehicles older than 15 years from Indian roads, especially those failing fitness or emissions tests. The scrappage program now includes both private and commercial vehicles and is mandatory for certain categories, particularly government-owned fleets. Private vehicle owners, however, can voluntarily surrender their vehicles and claim scrappage incentives.

Car Scrappage Policy Updated in India – August 2025 Benefits & Rules

Key Highlights of the Updated Scrappage Policy

The August 2025 update of the Car Scrappage Policy India 2025 brings significant clarity and benefits for vehicle owners. These enhancements are part of the Ministry of Road Transport and Highways’ clean mobility and pollution reduction initiatives.

Here are the major changes:

  • Increased cash incentive: ₹25,000 to ₹50,000 for cars

  • Full waiver of registration fees for replacement vehicles

  • Up to 25% rebate on road tax for new car purchases

  • Fast-track deregistration and scrapping certification within 7 working days

  • Fitness test fees increased to discourage keeping older vehicles

The revised old vehicle disposal scheme also enables state transport departments to partner with authorized scrappage centres (RVSFs) for transparent and faster processing.

Eligibility and Conditions for Vehicle Scrappage

To qualify under the India car policy, your vehicle must meet certain conditions:

  • Private cars: Older than 15 years and failing fitness/emissions tests

  • Commercial vehicles: Older than 10 years (in pollution control zones)

  • Government vehicles: Automatically deregistered after 15 years

  • Vehicles damaged in fire, floods, or major accidents

Only vehicles deemed End-of-Life (ELV) by approved testing centres will receive a valid scrapping certificate, which must be submitted to avail tax or purchase benefits.

Table: Vehicle Scrappage Incentives in 2025

Vehicle Type Scrappage Incentive Additional Benefits
Private Cars ₹25,000 – ₹50,000 Registration fee waiver, tax rebate
Commercial Vehicles ₹40,000 – ₹75,000 Fitness test exemption for new vehicle
Government Vehicles Compulsory disposal No reuse allowed after 15 years
Two-Wheelers ₹5,000 – ₹10,000 Scrap bonus from dealer (if applicable)

Process to Scrap Your Vehicle Under the New Rules

Owners can now scrap their vehicles by visiting authorized scrappage facilities recognized by their state RTO. The process is simple, digital, and designed to reduce paperwork under the Car Scrappage Policy India 2025.

Steps to scrap your vehicle:

  • Visit nearest authorized scrappage centre (RVSF)

  • Submit vehicle documents and Aadhaar/PAN

  • Vehicle undergoes ELV test and dismantling inspection

  • Scrappage certificate issued within 7 working days

  • Use certificate to avail tax and dealership discounts

The government has also launched a centralized vehicle scrappage portal to track status, check eligibility, and book appointments.

Benefits for Consumers and the Environment

The updated India car policy ensures multiple benefits for both individuals and society. Scrapping outdated vehicles helps reduce air pollution, improve fuel efficiency on roads, and stimulates demand for new vehicles.

Key benefits include:

  • Cleaner environment through removal of high-emission vehicles

  • Direct savings through scrappage incentives and new vehicle tax rebates

  • Boost to automobile industry and creation of jobs in scrappage centres

  • Transparent, digital process reducing middlemen and corruption

This revised old vehicle disposal scheme plays a vital role in India’s sustainable transport transformation.


FAQs

What is the Car Scrappage Policy India 2025?

It’s a government policy encouraging vehicle owners to scrap outdated vehicles in exchange for financial benefits and registration tax waivers.

Who is eligible to scrap their car under the updated policy?

Private vehicles older than 15 years and commercial vehicles older than 10 years in pollution zones are eligible, especially if they fail fitness tests.

How much money do I get for scrapping my vehicle?

You can receive ₹25,000 to ₹50,000 for private cars and even higher for commercial vehicles, depending on the model and age.

Do I need to pay registration fees for a new car after scrapping?

No, you get a 100% waiver on registration fees and up to 25% rebate on road tax when you buy a new vehicle using the scrappage certificate.

How long does it take to scrap a vehicle and get the certificate?

Once submitted at an authorized centre, it usually takes up to 7 working days to complete the process and issue the certificate.

Can I scrap a two-wheeler under this scheme?

Yes, two-wheelers can also be scrapped, and select dealers offer bonus incentives for replacement.

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