RTO rules for car scrapping and deregistration

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12 Dec 2023

Navigating RTO Rules: Car Scrapping Simplified

Car scrapping involves dismantling and recycling old vehicles and salvaging reusable parts and materials. The process of vehicle scrapping helps manage waste, reduces environmental impact by recycling, and complies with regulations. India has the world’s third-largest network of roads, with a total number of vehicles of around 326.3 million.

With such mammoth numbers, car scrapping is nothing less than a necessity. However, with the affordability of preowned cars, it is not always easy to scrap cars. With the aim of reducing urban pollution, Finance Minister Nirmala Sitaraman introduced the vehicle scrapping policy in the 2021 Union Budget. On 18th March 2021, Shri Nitin Gadkari, Minister for Road Transport and Highways, revealed the details of the Vehicle Scrappage Policy, India. The scrap vehicle policy will gradually phase out commercial and passenger vehicles that are over 15 to 20 years old, respectively.

RTO rules for car scrapping and deregistration

Let us take a look at the RTO Rules for Car Scrapping:

  1. The car scrap can be done at an authorised scrap dealer, only after vehicle registration

  2. You would have to produce/ submit documents such as:

    • Fitness certificate

    • Owner’s PAN Card

    • Owner’s Aadhaar Card

  3. The car scrap dealer will inspect the vehicle and quote a price

  4. As the car/ vehicle owner, you can negotiate the price that is quoted by the dealer

  5. Once you give a thumbs up, the dealer will complete all required checks, and proceed to remove and segregate the car parts

  6. Keep in mind that the chassis number is removed from the car before it goes for car scrapping

  7. It is recommended that you witness the car scrapping process so that there can be no fraud/ illegal sale of the car parts

Let us take a look at the RTO Rules for Car Deregistration:

  1. As the car owner, you need to inform your local RTO about the vehicle scrapping.

  2. Post the scrapping car, you need to surrender the original RC, registration certificate, of your car

  3. You would have to write an application to deregister the car. You would have to submit an affidavit stating the vehicle scrapping reason

  4. A NOC will also be needed stating that the vehicle was not involved in any ongoing judicial proceedings and that there are no loans due

  5. Post verification of all the paperwork, the RTO will deregister your vehicle.

Conclusion

Just like buying car insurance is a mandate at the time of car purchase, bidding adieu to your beloved old car, through car scrapping is a requirement now. Car scrapping ensures proper disposal while reclaiming valuable components for re-utilisation, contributing to a sustainable automotive lifecycle. That’s not all; with the scrap vehicle certificate, you can also enjoy some special rewards from the government and the car company. When you send your old car for car scrap, you can enjoy a 4% to 6% discount on a new vehicle. You may also be eligible for a road tax rebate of up to 25%. You might also be able to get a waiver on your new car’s registration fee.

Related blogs

What Is The Impact Of Scrapping A Car On An Insurance Policy

Reasons why you should cancel your RC after scrapping your car


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Team Kotak GIC

The content of this blog has been created and carefully reviewed by the esteemed team at Kotak General Insurance, with the sole purpose of providing valuable guidance and sharing insights on the importance of general insurance. Our objective is to assist users in making informed decisions when purchasing or renewing insurance policies for their cars, bikes, and health. Our expertly curated information aims to empower our readers with the knowledge they need to protect their valuable assets and financial interests.