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Old Car Scrap Policy. Rebates on New Car with lower Road Tax

Old Car Scrap Policy. Rebates on New Car with lower Road Tax

If you have over 15 Year Old Car and if you scrap same, can get in 5% Rebate on New Car Purchase. Details on New Notfication

 

Old Car Scrapping Policy

Ministry of Road Transport and Highways has announced Vehicle Scrappage Policy where

  • Guidelines issues of Car Scrapping Price to be 4% to 6% of similar New Car in Market.
  • 5% Discount on Purchase of New Car against Scrapping Certificate
  • Road Tax Rebate of 25% on Purchase of New Car

 

Objective is to

  • Counter in Pollution from these Old Cars
  • Lead to Incremental Sales of Automobile Manufacturers by Old Car Scrap Policy
  • Yes, Government Revenue in form of GST + Cess of additional Incremental Sales
  • Also, giving Incentive to Car Buyer to upgrade to latest emission compliant car with Rebate Incentive on to it

 

Old Car Scrap

Why is it a Worst Time to Buy Car from Jan 2018 to March 2019 in India

The Framework is a game changer. For Instance

Say you have 15 Year Old Honda City and looking to buy Hyundai Creta Sx Petrol then buyer would be eligible for :- say minimum 4% of Existing Price of Honda City 

Now, even if we take base Model of City which is priced at Rs 11 Lakh - means you will get in Rs 45,000 (rounding off) as scrap price of Old Honda City

Additionally will get in 5% Discount on Purchase of Hyundai Creta Sx at Rs 13.69 Lakh - means you will get in Rs 70,000 (rounding off) after showring Scrap Certificate

Further 25% Rebate on Road Tax - making a great deal as Road Tax on Creta Sx in Delhi is Rs 1.37 Lakh, with 25% Tax Rebate will get in Rs 34,000 Tax Saving

Essentially it all makes in:- Rs 45,000 Scrap + Rs 70,000 Discount + Rs 34,000 Tax Saving to almost Rs 1.5 Lakh value of 15 Year Old Honda City - which otherwise if you scrap in earlier would have fetched you Rs 30,000 to 40,000 in a market like Delhi

 

Some Nitty Gritty

Also, are nitty Gritty yet to be declared by Government in terms of

1. On Which Segment of Cars would be 5% Rebate Applicable: Like if someone has 15 Year old Maruti Alto in family and buying Toyota Fortuner worth Rs 36 Lakh Exshowroom, would he be eligible for Rs 1.8 Lakh Rebate (5% Rebate) as this is a very important step which needs to be cleared.

If there is no restriction then this rule can be abused - people who buying luxury car may even consider buying Used Alto, Nano and other 14 year Old Cars as 5% Rebate can matter a lot

 

2. Which are Approved Scrap Center: Means - can one Scrap at any authorized Scrap center or need to scrap only at Government Authorized Center

 

So, wait for few weeks post which the nitty gritty will be announced by Government on same.

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Comments 1

Guest - Guest on Friday, 19 March 2021 20:59

Is new scrap car policy advantage applicable on already booked (but not delivered/not registered) cars too?

Is new scrap car policy advantage applicable on already booked (but not delivered/not registered) cars too?
Guest
Monday, 19 April 2021

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