Maintenance of old cars is likely to be costly; once the vehicle scrapping policy comes into effect

After the vehicle scraping policy announced on Monday by the Union Budget 2021, the hold on 15 year old vehicles will become expensive.

While the cost of obtaining a fitness certificate for such commercial vehicles will increase by 62 times, the fee for renewal of registration of private vehicles will increase by up to eight times. Also, states will now have to levy green tax over and above the road tax that every vehicle owner will have to pay.

The Ministry of Road Transport will announce the scraping policy in the next two weeks. According to the Motor Vehicle Law, renewal of fitness certificate is mandatory annually after it is over eight years old. On top of this, states can levy green tax, which can be 10-25 percent of the annual road tax. This is what a vehicle owner pays in addition to the normal road tax.

Similarly, in case of 15-year plus personal vehicles, the registration fee will go from Rs 300 to Rs 1,000 for two-wheelers and it will increase from Rs 600 to Rs 5,000 for cars. States can impose a green tax for five years on such vehicles, which will be in addition to the road tax.

In both cases, vehicles that fail the automated fitness test will be de-registered from the vehicle’s central database, Vahan. Out of the 25 currently approved automated fitness testing centers, only seven are operational and there are only two authorized scrapping centers in Noida.

The ministry has also been tasked to find out the possibility of coming up with voice messages about the benefits of the scraping policy in mobile phones of vehicle owners and drivers at petrol pumps, dealers and service centers. The ministry will also come up with measures to prevent any misuse of policy to remove any stolen vehicle.

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