RC Cancellation After Car Scrapping or a Total Loss
If your car has reached the end of its life or has been declared a total loss and scrapped,Read more
What is the Vehicle Scrappage Policy?
Under the Union Budget 2021, the Government of India announced the Vehicle Scrappage Policy. Under this, old and polluting vehicles, or those declared a total loss and no longer fit for road use, can be scrapped through authorised Registered Vehicle Scrapping Facilities (RVSFs). These facilities dismantle and recycle them in an environmentally responsible manner. After the completion of the vehicle scrapping and RC cancellation processes, the vehicle is permanently removed from the official registration records.
What is the Total Loss of a Car?
In motor insurance, the total loss of a car is when the cost of repairing a car is more than 75percent or more of its IDV (Insured Declared Value). The IDV of a car is the maximum amount that the insured can claim for the loss or damage. Thus, if the insurer is required to pay more than three-fourths of the total IDV towards the repair of your car, it is considered a case of total loss in car insurance, and it can take place due to an unforeseen incident, such as an accident, fire, calamity, or theft. However, the concept of the total loss of a car does not apply to third-party insurance.
What Should You Do in Case of Total Loss of Your Car?
In case your motor insurer has declared your car as a total loss and it is incapable of use, follow these steps:
- Step 1: Inform Your Insurer: Contact your car insurance provider immediately after the damage or loss and file a claim. The insurer will inspect your car and decide if it is a total loss.
- Step 2: Complete the Claim Process: Submit the required documents and complete the claim formalities. Once approved, the insurer will settle the claim as per your policy terms.
- Step 3: Scrap Your Vehicle (if applicable): If the car cannot be repaired or legally used again, have it scrapped through an authorised RVSF. Once the scrapping process is complete, the facility will issue a Certificate of Deposit.
- Step 4: Apply for RC Cancellation: Submit an application and necessary documents to your RTO to cancel your car's RC.
What is RC Cancellation?
RC cancellation is the process of permanently removing a vehicle's registration from the RTO records. Once the registration is cancelled, the vehicle is no longer recognised as an active registered vehicle. The terms RC cancellation and RC surrender are often used interchangeably, and the exact terminology and procedure may vary a little across state transport authorities.
Why Should You Cancel Your RC After Scrapping Your Car?
RC cancellation is an important legal step after scraping your vehicle. Section 55 of the Motor Vehicles Act, 1988, states that if the motor vehicle is permanently of no use or destroyed it is the responsibility of the car owner to report it to the RTO and submit its RC for cancellation. Besides the legal compliance, here are the reasons why you should cancel your RC after vehicle scrapping:
- Prevents misuse of your vehicle's identity
- Protects you from future legal liabilities
- Updates government registration records
- Helps avoid future taxes or penalties linked to the vehicle
- Finalises the vehicle scrapping after obtaining the Certificate of Deposit
RC Cancellation Process After Scrapping a Car
In general, the RC cancellation process involves the following steps:
- After scrapping your car at an authorised RVSF, obtain the Certificate of Deposit.
- Apply for RC cancellation with your respective RTO and provide all the necessary documents for verification.within 14 days.
- After verifying the RC cancellation application and supporting documents, the RTO cancels the RC, and the vehicle is removed from the official registration records.
- With the cancellation of the RC, your car is considered scrap and has no longer in existence. Moreover, your vehicle cannot be registered to someone else.
Note- Since the RC is cancelled by the RTO of the state where you reside, the rules and cancellation fee will vary from one state to another.
Documents Required for RC Cancellation
While the exact documentation for RC cancellation may vary by state, you generally need the following:
- Original RC of the scrapped vehicle
- Certificate of Deposit issued by RVSF
- Identity and address proofs of the vehicle owner
- Application for RC cancellation as prescribed by the RTO
- Any additional documents requested by the RTO
Is There Any Fee for RC Cancellation?
Yes, some RTOs charge a nominal administrative fee for RC cancellation that can range from Rs. 100 to Rs. 500, depending on the specific state. However, in some states or under some circumstances, the process may even be free. To check the latest applicable fee for RC cancellation, contact your respective RTO or visit the state's transport department website.
How to Check RC Cancellation Status?
After submitting the application for RC cancellation, you can check its status in the following ways:
- Visit your local RTO.
- Use your state's online transport services portal.
- Track it using the acknowledgement or reference number you received during submission.
Summing It Up
RC cancellation is the final step after scrapping a vehicle. It officially removes the vehicle from government records, protects you from future liabilities, and ensures the scrapping process is completed as per the applicable guidelines. Moreover, when choosing car insurance, make sure you opt for a comprehensive policy along with the zero dep add-on to receive full IDV as the compensation amount in case of a total loss and ensure a smooth RC cancellation process.
