Vehicle Scrappage Policy for Two-Wheelers in India

What is the Vehicle Scrappage Policy?

The Vehicle Scrappage Policy is a government initiative that promotes the voluntary scrapping of old and unfit vehicles through authorised Registered Vehicle Scrapping Facilities (RVSFs). The objective of making and following this vehicle scrappage policy is:

• Remove old and polluting vehicles from Indian roads.
• Improve road safety.
• Encourage environmentally responsible vehicle recycling.
• Increase the use of fuel-efficient and cleaner vehicles.
• Promote the organised vehicle recycling industry.

Under the policy, eligible vehicles that fail the prescribed fitness assessment or are voluntarily surrendered by their owners can be scrapped in accordance with the prescribed procedure.

Is the Vehicle Scrappage Policy Applicable to Two-Wheelers?

Yes. The Vehicle Scrappage Policy also applies to motorcycles and scooters. As per the Parivahan guidelines, all the two-wheelers have to follow this:

• Private two-wheelers that are over 20 years old may be required to undergo a fitness test for continued registration. If the vehicle fails the test or the fitness certificate is not renewed, it may need to be scrapped in accordance with applicable rules.
• Commercial vehicles have to follow separate fitness and registration requirements under the applicable transport regulations.
• Apart from age, owners may also voluntarily scrap their bike if it has become unsafe, uneconomical to repair or has been declared a total loss.

Why Was the New Vehicle Scrappage Policy Launched?

The new vehicle scrappage policy aims to stop the usage of old two-wheelers on the roads to reduce air pollution. An old and unfit bike not only contributes to air pollution but is also more prone to mishaps, such as road accidents. That is why the new Vehicle Scrappage Policy was officially introduced in the Union Budget on February 1, 2021, and formally launched on August 13, 2021.

Here, we have mentioned some of the crucial points for the release of the Vehicle Scrappage Policy in India:

• Reduces Air Pollution: Older vehicles, especially those with outdated technology, emit higher levels of pollutants. Removing them from the roads helps improve air quality and public health.
• Improves Road Safety: Ageing vehicles are more prone to breakdowns and accidents due to wear and tear. The policy encourages replacing these vehicles with safer, newer models.
• Boosts the Economy: The policy stimulates the automotive industry by encouraging the purchase of new vehicles. It also promotes the recycling and recovery of valuable materials from scrapped vehicles, benefiting the metal industry.

Just as having third-party bike insurance is essential for financial protection in the event of an accident, the scrappage policy is crucial for environmental protection and road safety.

What Does "Bike Scrapped" Mean?

A scrapped bike is a motorcycle or scooter that has been permanently dismantled and recycled through an authorised Registered Vehicle Scrapping Facility (RVSF). Simply selling a damaged bike to a local scrap dealer does not complete the legal scrapping process.

Once a bike is scrapped, these need to be followed:

• It cannot be legally driven on public roads.
• Its Registration Certificate (RC) is cancelled.
• Its details are removed from the active vehicle registration records after completion of the prescribed process.
• Its recyclable materials are processed through authorised recycling channels.

When Should You Scrap Your Bike?

You should consider scrapping your bike in the following cases:

• It is over 15-20 years old and fails the prescribed fitness test.
• It has been declared a total loss after an accident.
• Repair costs exceed its market value.
• It has suffered severe fire or flood damage.
• It repeatedly fails emission or fitness requirements.
• The bike has become unsafe to ride.
• Maintenance costs have become uneconomical.

Benefits of Scrapping an Old Bike

Legally scrapping an old bike offers several advantages, explained below:

• Helps Reduce Pollution - Old vehicles generally emit more pollutants than newer models. Scrapping them supports cleaner transportation.
• Improves Road Safety - Removing unsafe and mechanically unfit vehicles helps reduce road safety risks.
• Promotes Responsible Recycling - Authorised scrapping centres recycle steel, aluminium, plastic and other reusable materials using environmentally responsible methods.
• Avoids Future Legal Liabilities - Cancelling the Registration Certificate prevents the vehicle from being misused in your name.
• Frees Up Parking Space - Scrapping unused vehicles helps eliminate unnecessary storage and maintenance expenses.

RTO Rules for Scrapping Two-Wheelers in India

As per the Motor Vehicle Act, 1988, under Section 55, it is mandatory for a bike owner to cancel the Bike's RC after scrapping.

The bike owner must inform the Regional Transport Office (RTO) within 14 days of the total loss. Then, RTO will cancel the RC of the bike. Then your bike will be nothing but scrap material, and the RC will not be registered to anyone else.

The cancellation of RC will be completed only when the police send a clearance report to the RTO. Once it is cancelled, RTO will issue a non-utilisation certificate for the bike within 4-5 weeks. The rules and cancellation fee will vary according to the state.

How to Find Two-Wheeler Scrap Dealers Near Me?

Finding a two-wheeler scrap dealer is easy. All you need to do is search online on your web browser or just ask local mechanics or garages, or even check with your local RTO. When choosing a dealer, consider their reputation, location, and price. However, make sure to get proper documentation for your records.

Who Can Scrap a Bike?

Generally, the registered owner of the vehicle can initiate the scrapping process. A bike may be eligible for scrapping if:

• The owner voluntarily chooses to scrap it.
• The bike has reached the end of its service life.
• It has failed the required fitness assessment.
• It has suffered irreparable accident damage.
• The insurer has declared it a total loss.

How to Scrap a Bike in India?

Follow these steps to legally scrap your bike.

1. Locate an Authorised Scrapping Facility

   Choose a Registered Vehicle Scrapping Facility (RVSF) recognised by the competent authority.

2. Submit Documents

   Provide ownership and identification documents for verification.

3. Vehicle Inspection

   The facility verifies the bike details and confirms ownership.

4. Vehicle Scrapping

   After verification, the bike is dismantled and processed for recycling.

5. Obtain the Certificate of Scrapping

   Once scrapping is completed, the facility issues the Certificate of Scrapping or Certificate of Deposit.

6. Apply for RC Cancellation

   Submit the required documents to your RTO to cancel the Registration Certificate.

How to Cancel RC of a Bike?

If your bike insurance company has declared your bike a total loss, you can begin the RC cancellation process. You can follow the procedure mentioned below to cancel the RC of a bike:

1. Find a Two-Wheeler Scrap Dealer

   Find a two-wheeler scrap dealer near you, and sell your totalled bike to them.

2. Get Proof of Scrapping

   The dealer will provide you with the chassis number after cutting the parts that can be recycled, and this will prove that your bike has been scrapped.

3. Obtain Affidavit

   Get an affidavit stating that your bike has been scrapped.

4. Inform the RTO

   Inform the nearest RTO about this.

5. Submit Documents

   Submit the documents required for RC cancellation of your bike to the nearest RTO.

6. RTO Verification and Police Clearance

   The RTO will verify all those documents and obtain police clearance. Then they will cancel the RC of your bike

7. Transfer to Original RTO

   Next, the report will be transferred to the original RTO where the bike got registered initially

8. RC Cancellation and Certificate

   That original RTO will cancel the RC. They will inform you when the RC is cancelled. After that, you will receive a non-utilisation certificate for your bike from that RTO.

Mandatory Documents Required to Cancel the RC

You will have to provide the documents mentioned below to the RTO:

• Registration certificate of the scrapped bike
• Cutting of the chassis number from the scrapped bike
• Affidavit that states the bike is scrapped
• Bike insurance policy
• PUCC of the bike

Importance of Cancellation of RC in Total Loss of Bike

It is crucial to cancel the RC of the bike in the event of a total loss. Here are some of the reasons why you need to be extra careful when it comes to cancelling the RC of the totalled bike:

• Prevent Misuse of Damaged Bike Documents - In a road accident or due to a natural calamity, if the bike is completely damaged, the insurance company declares it a Total Loss (TL). As a bike owner, you are required to cancel the bike's RC. If you do not cancel the RC of the scrapped bike, there is a risk that fraudsters or thieves could misuse its documents. They might give a new identity to a stolen bike, or might use your documents for illegal activity.
• Prevent Bike Theft - When you sell your bike to a scrap dealer without cancelling the RC, the thieves usually see it as an opportunity. When a thief steals a bike, they try to hide it in plain sight. They change the identity of the stolen bike to match your RC, its engine number, and chassis number, and then replace it with the one they stole. But if you cancel the RC, then these activities can come to an end.

Things to Keep in Mind While Cancelling the RC

You will have to keep certain things in mind when you go for the cancellation of your bike's RC:

• Inform your RTO within 14 days of scrapping your bike.
• Make sure you have active bike insurance policy for a smooth cancellation process.
• Renew bike insurance in a timely manner to be eligible for a total loss claim.

How Does the New Vehicle Scrappage Policy Work?

Under the Vehicle Scrappage Policy 2021, an old two-wheeler needs to go through a test to assess the vehicle's fitness and durability. Take a look at how the new policy works, along with the mandatory test that every old two-wheeler has to undergo under the new policy:

• Fitness Test: As per the new vehicle law, all two-wheelers aged 20 years or more need to undergo a mandatory fitness test. Those who have registered their vehicle for commercial purposes will have to undergo this fitness test after 15 years to renew their registration certificate for the next 5 years.
• Computerised Fitness Test: The mandatory vehicle fitness test, which is currently conducted manually by a person authorised by an RTO, is soon going to be computerised. This advanced fitness test service will be available under a Public-Private Partnership Model. There will be no human intervention during the computerised test, and thus, the results will be correct & valid.
• Mandatory End of Life Vehicle Certificate: In case a two-wheeler fails to pass the fitness test, it will be issued with an End of Life Vehicle certificate and deemed unfit for road use. It cannot be re-registered, and any insurance company will provide a bike insurance policy. Moreover, the unfit bike/scooter must be scrapped at a registered vehicle scrapping facility. On the contrary, those two-wheelers who pass this test can re-register with the RTO.

Benefits Offered Under the New Vehicle Scrappage Policy

In case your two-wheeler fails the fitness test and you are forced to scrap it under the new vehicle scrappage policy, you can still enjoy the following benefits:

• Get the Scrap Value of Your Old Two-wheeler: You can get the scrap value of your bike when you scrap your old & unfit bike at a registered vehicle scrapping facility centre. A scrapped bike is valued by the weight of its materials, like metal and plastic.
• Discount on New Two-wheeler: Under the new vehicle scrappage policy, you are eligible for a special discount on the purchase of a new bike against your scrappage certificate. The Ministry of Road Transport and Highways has proposed a 5% discount for people whose vehicles have been scrapped under the policy. Thus, you can save money while purchasing a new two-wheeler.
• Discount on Road Tax and Vehicle Registration: The government is also offering a discount on road tax and vehicle registration to people whose two-wheelers have been scrapped under the new policy. As per the Vehicle Scrappage Policy 2021, the government is allowed to provide a rebate of up to 25% on the road tax. Also, the registration tax on the new bike has been completely waived.
• Environmental Benefits: The idea is to reduce air pollution and promote responsible disposal of old vehicles. Moreover, it stimulates the automotive and metal industries as it promotes recycling.

Can I Scrap My Bike Without RC?

Generally, no. The Registration Certificate serves as proof of ownership and is usually required by authorised scrapping facilities.

If your RC has been lost or damaged, you may first need to apply for a duplicate RC or follow the procedure prescribed by your RTO before initiating the scrapping process.

Can I Scrap My Bike Without Bike Insurance?

An expired two-wheeler insurance policy does not usually prevent the vehicle from being scrapped. However, certain scrapping facilities may request the last available insurance document during verification.

Check the document requirements with the authorised scrapping facility before visiting.

How Much Scrap Value Will I Get?

The scrap value of your bike depends on several factors, including:

• Weight of the vehicle
• Metal content
• Current scrap prices
• Condition of reusable parts
• Location of the scrapping facility

Premium motorcycles or bikes with reusable components may receive a higher scrap value than severely damaged vehicles.

Difference Between Selling and Scrapping a Bike

Many people assume that selling a bike and scrapping it means the same. However, the two are different.

Difference Between Total Loss and Bike Scrapping

Many people assume that a total loss automatically means the bike has been scrapped. However, the two are different.

Things to Remember Before Scrapping Your Bike

Before handing over your bike for scrapping, you need to follow these tips:

• Remove personal belongings
• Clear pending traffic challans, if applicable
• Keep all ownership documents ready
• Take photographs of the vehicle
• Obtain the Certificate of Scrapping
• Complete the RC cancellation process promptly

Final Words!

The Vehicle Scrappage Policy encourages responsible disposal of old and unfit vehicles while improving road safety and reducing environmental impact. If your bike has reached the end of its service life or is uneconomical to repair, scrapping it through an authorised Registered Vehicle Scrapping Facility and completing the RC cancellation process ensures the vehicle is legally removed from the registration records.

Before scrapping your bike, check the applicable RTO requirements, keep the necessary documents ready and choose only authorised scrapping facilities to complete the process smoothly and in compliance with the law.

FAQs - Vehicle Scrappage Policy for Two-Wheelers in India