TL;DR
- Leading passenger carmakers like Maruti Suzuki, Hyundai, Tata Motors, Mahindra and Mahindra, and a few others have agreed to provide discounts against valid scrapping certificates.
- Car owners can avail of a 1.5% discount on the ex-showroom price up to Rs. 20,000 on a new passenger car.
- Commercial vehicle manufacturers have agreed to offer a 3% discount on the ex-showroom price for a new cargo vehicle.
After concluding a meeting with the Society of Indian Automobile Manufacturers (SIAM) CEOs, the Union Minister for Road Transport & Highways, Nitin Gadkari, has announced that automakers will “offer discounts for the purchase of new vehicles” against scrappage of old vehicles. While the move could come as a relief to customers, it could also help the Indian auto industry get out of the sales slump it has been experiencing since the second quarter of 2024. The bigger objective is to encourage the scrappage of old and unfit vehicles.
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Which Companies Have Agreed To Offer A Discount Against Scrappage?
Leading passenger carmakers like Maruti Suzuki, Hyundai, Tata Motors, Mahindra and Mahindra, Kia Motors, Toyota Kirloskar, Honda, Nissand India, JSW Motor, Renault, and Skoda Volkswagen have agreed to offer a discount against scrappage of old motorcars.
Several commercial vehicle manufacturers, such as Tata Motors, Ashok Leyland, Volvo Eicher Commerical vehicles, Mahindra & Mahindra, and Force Motors, have also agreed to offer scrappage discounts.
However, the discount rates and tenure vary for commercial and passenger vehicles.
How Much Discount Can I Avail On A New Car By Scrapping My Old Car?
- Car owners can avail of a 1.5% discount on the ex-showroom price up to Rs. 20,000 on a new passenger car bought against a valid scrappage certificate. Mercedes Benz has announced a flat Rs. 25,000 discount above existing offers by dealers.
- Commercial vehicle manufacturers have agreed to offer a 3% discount on the ex-showroom price for a new cargo vehicle (weighing more than 3.5 tons) and 1.5% for those weighing less against a valid scrappage certificate.
- Buyers should also get up to 25% concession on road tax for passenger vehicles bought against scrappage certificates. Don’t confuse road tax with RTO charges, as road tax is a portion of the total RTO registration charges you pay while getting a new car.
It is important to mention that buyers who buy a new car against a scrappage certificate can only claim the scrappage discount; they won’t be eligible for any additional exchange bonuses on a particular model.
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The Current Scrappage Discount Rates Are Applicable For A Limited Time
- Buyers will only get the aforementioned scrappage discounts if they’ve scrapped their old car in the last six months.
- Passenger vehicle manufacturers have agreed to offer scrappage discounts for one year.
- Commercial vehicle manufacturers have agreed to offer discounts for two years.
Given that the scrappage discount only applies for one year on passenger vehicles, it looks like the government could revisit the policy in 2025 and, based on the feedback from automakers, make the required changes.
Like every other policy change, it would take some time before the masses become aware of the benefits and the process involved, making it crucial for the government to extend the policy for a couple of years to see any noticeable differences in the number of unfit cars on the roads.
How Can I Apply For Car Scrapping?
If you wish to scrap your car, you to go to “https://vscrap.parivahan.gov.in/vehiclescrap/vahan/welcome.xhtml” and proceed with the “Services for Vehicle Owner” button. After that, you’ll be asked to enter some details, like the car owner’s name, the Aadhaar number for verification, and the car’s chassis number. Then, you’ll be asked to fill out a form with all the required details, following which you’ll be connected with the authorized scrap service provider in the area.
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