Bankbazaar

RTO Rules For Selling Of Cars As Scrap In India

The RTO has laid down rules for scrapping old vehicles in India. As per the norm, cars that are older than 15 years cannot be used. Though they can be transferred to a new state for re-registration, it is a hassle. Instead, one can scrap the car.
More

In India, car scrapping is not an organised activity like the sale of used cars. Old cars have been contributing a lot to the pollution woes in Delhi NCR. Recently, there was a National Green Tribunal order that banned the use of cars that are older than 15 years in Delhi. The Regional Transport Offices (RTOs) have stopped re-registering these vehicles and checking their fitness. Until now, there has not been any uniform policy for old vehicles. The impact of the National Green Tribunal order may be detrimental to car owners, as they may not be aware of the formalities of dealing with an aged vehicle. When it becomes illegal to operate such a car on Indian roads, what could they possibly do with it?

Car owners have the option to sell or transfer their vehicles to a neighbouring state before their Registration Certificate (RC) expires. It is important that this is done before the expiry of the RC, as the RTO will not renew the RC after the car completes 15 years. When a car is transferred to another state, it will have to be re-registered at the new RTO, and this registration has to be updated in the records of the old RTO. Otherwise, there is always a risk of the car being used for illegal activities. Car scrapping is an option in front of a car owner who is not keen on transferring the vehicle to another state.

Car Scrapping - What You Should Know:

To avoid the complexity of transferring a car to another state, the car owner can scrap the vehicle. Scrapping an old vehicle is one of the safest options available. This ensures that the car is chopped into pieces and recycled. The chances of it being used for unauthorised activities are completely eliminated as well.

Some points to note about the scrapping process are as follows:

  • When the car is scrapped, its chassis number is taken out before the scrap is sent for recycling.
  • The car owner is expected to approach an authorised scrap dealer for car scrapping. The dealer should be able to ensure that the vehicle is disposed off in a safe manner without any adverse impact on the environment.
  • The car owner should also approach the RTO and inform them about the scrapping of the vehicle. There is an option to deregister the car as well.
  • The scrap dealer will perform a physical inspection of the car and quote a price for scrapping based on the weight of the vehicle. Once an agreement is reached, the scrap dealer will remove the car parts and segregate them into rubber, plastic, iron, etc.
  • The car owner can negotiate on the price he/she gets for different car parts, such as battery, tyres, etc. This largely depends on the condition of these parts as well. If the car has a CNG unit fitted, then this can also be dealt with separately.
  • One of the precautions you should take is to check whether the car has actually been scrapped by the scrap dealer. There could be instance wherein the scrap dealer does not really scrap the vehicle, and then it may change hands and be used for illegal activities. This could invite trouble for the original car owner, as the registration of the vehicle is in his/her name.
  • It is not necessary to submit the original RC to the scrap dealer. You should only furnish the photocopy of the RC.
  • You can take some photos of the scrapped car as evidence for further procedures at the RTO.

Valuation Of Old Cars:

  • If the car is not in working condition you are likely to get the rate per kilogram of the metal parts. The current rate is an average of Rs.15 per kg for metal parts.
  • If the car is in good working condition, the scrap dealer will sell the spare parts of the vehicle. Only the metallic body of the car will be scrapped. The scrap dealer is likely to get a good profit on the sale of the spare parts, so the car owner can request for a higher lump sum amount at the time of scrapping.

RTO Rules For Scrapping And Deregistration Of Vehicles:

  • The car owner will first have to write a letter to the authorised RTO about the car scrapping.
  • He/she will have to surrender the original RC of the car along with the chassis number that was cut out from the vehicle at the time of scrapping. This will be kept at the RTO as part of the historical records.
  • The scrap dealer’s confirmation on a letterhead with complete address is also required. The pictures of the scrap can be submitted at this time.
  • The vehicle owner should also submit an affidavit with the application for scrap and de-registration. The affidavit will mention that the car is not under any loan, insurance claims, or pending court cases. The affidavit will also confirm that the vehicle is not involved in thefts.

The RTO will verify the documents submitted and proceed with the next steps after it receives diligence reports from the traffic police and National Crime Records Bureau (NCRB). Verification is also done for the records maintained at the RTO office regarding sale or purchase of the car. If all records are found to be satisfactory, the car will be deregistered by the RTO.

The Society of Indian Automobile Manufacturers (SIAM) has made suggestions to the government to provide incentives to car owners who decide to scrap their 15-year old vehicles. The government in the US has a scheme that offers tax benefits and other incentives for such car owners. SIAM recommends that such a policy is implemented in our country so that owners would be encouraged to come forward for car scrapping.

What Happens To The Registration Number Of The Scrapped Car?

  • When the RTO completes its car scrapping formalities, the registration number of the vehicle is free for use by someone else. Hence, it is possible for a new car to get the registration number of an old car that has been scrapped.
  • The insurance company should also be informed about the car scrapping.

When the car is taken to a scrap dealer, you will have to show your identity proof, ownership proof, and residence proof. The car owner will receive a challan/certificate from the scrap dealer in return. This is a mandatory step enforced legally to avoid stolen vehicles from being taken for scrapping.

Policy To Scrap Old Commercial Vehicles Receives CoS Nod:

In February 2017, the Committee of Secretaries (CoS) provided approval to offer a bouquet of benefits to commercial vehicle owners when they take their vehicles for scrapping. This move aims to remove old vehicles from the roads, as these are the major cause for pollution. The policy is applicable only to commercial vehicles that are more than 15 years old. The proposal will require clearance from the Union Cabinet before it is implemented in the country.

The policy proposed that the owners of vehicles scrapped will be liable to receive the following incentives:

  • Half the excise duty and road tax for a replacement vehicle
  • Discounts from auto manufacturers
  • Fair value for the scrapped vehicle

These discounts are expected to bring down the cost of purchase of a new vehicle by about 15%. At the recycling centre the vehicle owner will be provided a certificate that will have to be submitted at the dealership for availing the incentives.

The ministry claims that this policy will be able to reduce emissions from vehicles by up to 25% and save a lot of fuel each year.

GST Update: GST of 18% is applicable on car insurance effective from the 1st of July, 2017

 4.5 / 5.0   by 2625 users
Used this product? Write a review >>

Policy Coverage

Customer Service

Claim Experience

Responsiveness

Cashless Garages

Display of any trademarks, tradenames, logos and other subject matters of intellectual property belong to their respective intellectual property owners. Display of such IP along with the related product information does not imply BankBazaar's partnership with the owner of the Intellectual Property or issuer/manufacturer of such products.

Car Insurance Reviews

Page 1 of 50 1 2 3 4 5
  • New India Car Insurance
    "Good in claim settlement"
    0.5 5.0/5 "Blown Away!"
    Last year I met with an accident, they done it very well. My car front bumper and radiator was damaged, I got the cash less garages the just taken one week of time to reflect the issue. I paid the premium of 11,000 for zero depreciation plan its fully covered.
    Was this review helpful? 0
    , ghaziabad
    Reviewed on Jul 19, 2019
  • ICICI Lombard
    ICICI Lombard Car Insurance
    "Premium should be reduced"
    0.5 5.0/5 "Blown Away!"
    I took car policy from ICICI Lombard, the policy cost is bit higher compared to others. I paid premium around Rs. 18,000 for one year comprehensive plan. It would be great if they reduced the cost of the premium so that many customer can avail their service.
    Was this review helpful? 0
    , noida
    Reviewed on Jul 19, 2019
  • New India Car Insurance
    "Needs improvement on the claim process"
    0.5 4.0/5 "Great!"
    I had chosen New India Assurance for my car insurance because I know a employee so I get some waiver off on the premium. I had claims on my previous car and the experience was not good. They need to improve on the benefits because I need to pay first for the cliam process then they send a cheque after 1 or 1.5 months that too after analyzing. I get 80% and sometimes 85% of the claim.
    Was this review helpful? 0
    , gurgaon
    Reviewed on Jul 19, 2019
  • New India Car Insurance
    "Good Experience"
    0.5 5.0/5 "Blown Away!"
    I purchased zero depreciation car insurance with New India Assurance, the cost is reasonable. Last year I paid the premium of Rs. 14,000 for one year policy its for four years old car. They got tie up with many service centers, the service is good I can reach at any time.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jul 18, 2019
  • Royal Sundaram Car Insurance
    "Useful Policy"
    0.5 5.0/5 "Blown Away!"
    My agency people where i took the car, they have proposed the policy from Royal Sundaram. I paid the premium amount of Rs. 13K nearly. My claim experience is very good and they have processed the claim within 1 day and its a 100% covered policy and i didn't pay anything from my pocket.
    Was this review helpful? 0
    , coimbatore
    Reviewed on Jul 18, 2019
  • United India Car Insurance
    "For new car, don't go for it"
    0.5 4.0/5 "Great!"
    The amount they are charging is less thats the reason i opted the car insurance policy from united India. I pay the premium amount of Rs. 2500. This is a third party insurance policy. Through consultancy, i used to renew my policy. I have not applied for any claim so far.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jul 16, 2019
  • HDFC Ergo Car Insurance
    "Whichever policy, Go for Zero dept"
    0.5 4.0/5 "Great!"
    My car insurance policy was with HDFC ergo because it was recommended by my dealer. I had claim experience and it was cashless and good. I did not pay anything from my pocket within 3 days, they have processed the claim and handed over my vehicle. It was a zero depreciation policy.
    Was this review helpful? 0
    , greater noida
    Reviewed on Jul 15, 2019
  • ICICI Lombard Car Insurance
    "Good policy "
    0.5 3.0/5 "Satisfactory"
    Every time, i used to visit their showroom to renew my car insurance policy. I'm receiving the no claim bonus. This is a bumper to bumper covered policy. I pay the premium amount of Rs. 10000 and I'm not sure about the IDV value. They are providing the hard copy of the documents immediately. I do not have any claim experience.
    Was this review helpful? 0
    , greater noida
    Reviewed on Jul 15, 2019
  • HDFC Ergo Car Insurance
    "Good"
    0.5 4.0/5 "Great!"
    HDFC ERGO GENERAL INSURANCE is the company where I have taken the car insurance policy for life time policy, the premium amount is nominal I use to yearly basis. I use to do payment through an online. Their service is good. They used to process the claim as soon as possible and they will take care of the claim.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Jul 13, 2019
  • Royal Sundaram Car Insurance
    "Should be transparent"
    0.5 1.0/5 "Really Bad"
    I met with an accident, I had to get it claim because I have Royal Sundaram car policy it was bumper to bumper at the time of enrollment they said its fully covered. But when I went for the claim, the insurer said car engine was not covered. Then I fought with Royal sundaram Insurance company. They quoted 1.40 lakh claim value and they made me to pay Rs. 70,000 from my end. However the additional cost of engine protection is just around Rs. 400 but I paid the premium of Rs. 20,000. I am very disappointed with them because they are not transparent. So I suggest to all, before going policy make sure whether its fully covered.
    Was this review helpful? 0
    , chennai
    Reviewed on Jul 13, 2019
  • Royal Sundaram Car Insurance
    "Policy not up to the mark"
    0.5 3.5/5 "Pretty good"
    The policy was overall good but end of the day i was not satisfied with the policy. When i purchase the policy, they said its a zero depreciation policy and its nil dept. But when i applied the claim, they have given me a claim only for 50%. In that, my car steering was not covered, Some engine parts and bumper was not covered.
    Was this review helpful? 0
    , hyderabad
    Reviewed on Jul 13, 2019
  • New India Car Insurance
    "GOOD"
    0.5 4.0/5 "Great!"
    I have bee using the car insurance policy with NEW INDIA ASSURANCE where the customer support is prompt by giving the information regrading the policy expiry date. I had no claim also the IDV value is good provided with the insurance policy.
    Was this review helpful? 0
    , mumbai
    Reviewed on Jul 10, 2019
  • ICICI Lombard Car Insurance
    "GOOD"
    0.5 4.0/5 "Great!"
    I have purchased the two wheeler insurance policy with the ICICI LOMBARD GENERAL INSURANCE where i had no claim experience with the policy. The premium paid was nominal also the IDV value is good with the policy. The service is good with the policy.
    Was this review helpful? 0
    , bangalore
    Reviewed on Jul 10, 2019
  • National Insurance Car Insurance
    "Good Claim Experience"
    0.5 4.0/5 "Great!"
    I believe the premium is lesser for National Insurance car policy and they have good claim ratio when compared to private sector but the service needs to be improved. I done a claim there a small damage within a week time they came and took the details and within 15 days I got the reimbursement. I paid last premium of Rs. 10,461 for my Maruthi Baleno car.
    Was this review helpful? 0
    , pune
    Reviewed on Jul 09, 2019
  • Oriental Insurance Car Insurance
    "GOOD"
    0.5 4.0/5 "Great!"
    I am using the policy since from last 2 years with ORIENTAL INSURANCE where they have given coverage is for bumper to bumper. The premium paid was nominal and the IDV value was good also there was a road side assistance. No claim bonus is there with the policy.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jul 08, 2019
  • Bajaj Allianz Car Insurance
    "Good policy"
    0.5 4.0/5 "Great!"
    When i purchased my new car, i have bought the car insurance from Bajaj Allianz. I have made th premium amount of Rs. 33000 for the coverage amount of Rs. 9 lakhs. I do not applied for any claim till now. For the premium amount has taken along with the loan amount.
    Was this review helpful? 0
    , kochi
    Reviewed on Jul 06, 2019
  • New India Car Insurance
    "Need to improve the service"
    0.5 4.0/5 "Great!"
    Taken my car insurance from New India. My dealer has given the policy with them and I'm continuing with the same company. I pay the premium amount of Rs. 16000 for the coverage amount of Rs. 7.50 lakhs. I haven't got my no claim bonus. When i informed about the same, they were not ready to provide proper response.
    Was this review helpful? 1
    , kochi
    Reviewed on Jul 06, 2019
  • National Insurance Car Insurance
    "Excellent car insurance policy"
    0.5 4.5/5 "Excellent!"
    I went to the dealer and he had a tie up with the National Insurance company hence i have chosen them. I paid the premium amount of Rs. 22000. They have provided me a coverage amount of Rs. 4 lakhs. They have provided me a hard copy of the documents. Its a zero depreciation policy. I get a facilities of no claim bonus, roadside assistance.
    Was this review helpful? 0
    , rewari
    Reviewed on Jul 05, 2019
  • HDFC Ergo Car Insurance
    "GOOD"
    0.5 4.0/5 "Great!"
    HDFC ERGO GENERAL INSURANCE is the company where i am using the car insurance policy since from last 6 months also the premium paid was nominal added on that the IDV value is nominal with the policy. The policy coverage is for bumper to bumper with the policy.
    Was this review helpful? 0
    , jamnagar
    Reviewed on Jul 05, 2019
  • review Car Insurance
    "EXCELLENT"
    0.5 5.0/5 "Blown Away!"
    I have been using the car insurance policy with the BHARTI AXA GENERAL INSURANCE where i have no claim experience also the premium paid was nominal also the IDV value was good with the policy. The policy coverage is for full also it is a good policy.
    Was this review helpful? 0
    , new delhi
    Reviewed on Jul 05, 2019
Common Loader Icon
Page 1 of 50 1 2 3 4 5
reTH65gcmBgCJ7k
This Page is BLOCKED as it is using Iframes.