India's vehicle scrappage policy is entering its most critical phase yet. With the government now mandating fitness tests for personal vehicles older than 15 years and commercial vehicles beyond 10 years, the era of indefinitely running ageing vehicles on Indian roads is drawing to a close. The Ministry of Road Transport and Highways has set an ambitious target of scrapping over 5 lakh vehicles annually by the end of 2026, backed by a growing network of registered vehicle scrapping facilities and a structured incentive programme. For millions of car owners across India, this policy shift carries direct financial implications — from the cost of fitness tests to the value of scrappage certificates that can offset new vehicle purchases.
Understanding the Vehicle Scrappage Policy
The Vehicle Scrappage Policy, formally known as the Voluntary Vehicle-Fleet Modernization Programme (VVMP), was announced by the Union Government in 2021 and has been rolled out in phases since then. The core idea is straightforward: remove old, polluting, and unsafe vehicles from Indian roads and replace them with newer, cleaner alternatives. The policy creates a structured framework involving automated fitness testing centres, registered vehicle scrapping facilities (RVSFs), and a certificate-based incentive system.
Under the current rules, personal vehicles (cars, SUVs, two-wheelers) that are older than 15 years from the date of initial registration must undergo a mandatory fitness test at a government-authorised automated testing station. Commercial vehicles face this requirement after 10 years. Vehicles that fail the fitness test — or whose owners choose not to attempt it — must be surrendered to a registered scrapping facility.
Key update: As of April 2024, the government has made it mandatory for all government-owned vehicles older than 15 years to be scrapped. This has already led to the deregistration of over 50,000 government fleet vehicles across India.
The policy is not about forcibly seizing vehicles. Owners still have the option to get their vehicle tested and, if it passes, continue driving it after paying the requisite green tax and renewal fees. However, the costs of maintaining compliance for very old vehicles are designed to make scrapping the more economical choice for most owners.
Fitness Test Requirements and Process
The automated fitness test is the centrepiece of the scrappage policy. Unlike the old system where RTO inspections were often cursory and prone to manipulation, the new automated testing stations use sensor-based equipment to evaluate vehicles on multiple safety and emission parameters. The entire process is recorded on camera and results are uploaded digitally, leaving little room for irregularities.
Parameters Tested at Automated Fitness Centres
| Parameter | What Is Checked | Fail Criteria |
|---|---|---|
| Brake Efficiency | Front and rear braking force | Below 50% (cars) / 45% (commercial) |
| Emission Levels | CO, HC, NOx, smoke opacity | Exceeds BS-IV equivalent limits |
| Headlamp Alignment | Beam direction and intensity | Misaligned or below minimum lux |
| Noise Levels | Exhaust and horn decibel reading | Above 80 dB for cars |
| Suspension & Steering | Play, alignment, and responsiveness | Excessive free play or drift |
| Body & Chassis | Structural integrity, rust, corrosion | Visible structural compromise |
| Speedometer Accuracy | Calibration check on rollers | Deviation above 10% |
The fitness test fee for personal vehicles is approximately Rs. 300-500 depending on the state, while commercial vehicles pay between Rs. 600-1,000. If a vehicle fails, the owner receives a detailed report and can attempt repairs and a retest within 30 days. A second failure results in the vehicle being declared unfit for road use.
Important: Driving an unfit vehicle after a failed fitness test can attract a penalty of up to Rs. 1,500 for the first offence and Rs. 3,000 for subsequent violations under the Motor Vehicles (Amendment) Act.
Incentives for Scrapping Your Old Vehicle
The government has designed a multi-layered incentive structure to encourage vehicle owners to voluntarily scrap their old vehicles rather than simply abandoning them or continuing to drive them illegally. When a vehicle is surrendered to a Registered Vehicle Scrapping Facility, the owner receives a Certificate of Deposit (CoD), commonly called a scrappage certificate, which unlocks several financial benefits.
Road Tax Rebate
Up to 25% concession on road tax for new vehicle purchased against scrappage certificate
Registration Fee Waiver
Complete waiver of registration fees for new vehicle bought with scrappage certificate
Scrap Value Payment
4-6% of ex-showroom price of the scrapped vehicle paid by the RVSF
Manufacturer Discounts
Several OEMs offer Rs. 15,000-50,000 discount on new purchase against scrappage certificate
Green Tax Exemption
New vehicle purchased against CoD is exempt from green tax for first 15 years
Insurance Benefit
Some insurers offer 5-8% discount on new vehicle insurance with scrappage certificate
The total financial benefit of scrapping an old car and buying a new one can range from Rs. 50,000 to over Rs. 1.5 Lakh depending on the vehicle segment, the state you are in, and the manufacturer's own scrappage exchange programme. States like Gujarat, Maharashtra, and Karnataka have been among the most aggressive in offering road tax concessions.
Good news for buyers: Several manufacturers including Maruti Suzuki, Tata Motors, Hyundai, and Mahindra are running dedicated scrappage exchange programmes that stack on top of government incentives. Maruti's programme, for instance, offers up to Rs. 35,000 on select Arena models.
Scrapping Infrastructure: Where India Stands
Achieving the 5 lakh annual scrappage target requires a robust network of scrapping facilities and automated fitness testing stations. The government has made significant progress on this front, though gaps remain. As of early 2026, over 90 Registered Vehicle Scrapping Facilities are operational across India, with another 40+ in various stages of approval.
| State | Operational RVSFs | Automated Fitness Centres | Vehicles Scrapped (2025) |
|---|---|---|---|
| Maharashtra | 14 | 22 | 45,000+ |
| Gujarat | 12 | 18 | 38,000+ |
| Tamil Nadu | 9 | 15 | 28,000+ |
| Uttar Pradesh | 11 | 20 | 32,000+ |
| Karnataka | 8 | 12 | 22,000+ |
| Delhi NCR | 7 | 10 | 35,000+ |
| Rajasthan | 6 | 9 | 15,000+ |
| Others | 23+ | 30+ | 85,000+ |
Major players in the scrapping space include CERO (Mahindra MSTC), Global AutoTech, and GreenStar Recycling. CERO, a joint venture between Mahindra and government-owned MSTC, operates the largest network with facilities in Greater Noida, Chennai, and Pune. The scrapping process is fully documented — from vehicle arrival to final dismantling — with digital records maintained for regulatory compliance.
Capacity gap: While 90+ facilities are operational, experts estimate India needs at least 200-250 RVSFs to handle the projected volume of 5 lakh+ vehicles annually. The government is fast-tracking approvals and offering land at concessional rates in industrial zones to bridge this gap.
What This Means for Used Car Buyers and Sellers
The scrappage policy has profound implications for India's used car market, which is already larger than the new car market in terms of units sold. If you are buying or selling a used car, understanding how this policy affects vehicle valuations, buyer sentiment, and market dynamics is essential.
Impact on Used Car Prices
Vehicles approaching the 15-year mark are already seeing accelerated depreciation in the resale market. A 12-year-old car that might have fetched Rs. 1.5-2 Lakh two years ago is now struggling to find buyers at Rs. 80,000-1.2 Lakh in many markets. The reason is simple — buyers are factoring in the limited remaining usable life and the potential cost of fitness tests and green tax into their purchase decision.
Conversely, vehicles in the 5-10 year age bracket are holding their value better than before. Buyers who might have considered a 12-15 year old budget car are now opting for slightly newer vehicles in the Rs. 3-5 Lakh range, pushing demand and prices up in this sweet spot. Models like the Maruti Swift, Hyundai i20, and Honda City from 2016-2020 are seeing particularly strong demand.
Seller tip: If you own a vehicle that is 10-13 years old, now is the time to sell. Waiting another 2-3 years will push your car into the "scrappage zone" where resale values drop sharply. List your car on VahanBazaar today to get the best price while demand is still healthy.
Impact on Buyer Decisions
Smart used car buyers should now treat the vehicle age relative to the 15-year cutoff as a critical purchase parameter, right alongside kilometres driven, ownership history, and service records. A car with 8 years of remaining life offers significantly more value than one with just 3-4 years left before the fitness test mandate kicks in.
Additionally, buyers should verify the RC registration date carefully — not the manufacturing year, but the actual date of first registration, as the 15-year clock starts from registration. A car manufactured in December 2011 but registered in March 2012 gets an extra few months of usable life. On VahanBazaar, our RC-verified listings show the exact registration date from VAHAN records, giving buyers complete transparency.
Buyer advantage: The scrappage policy is creating opportunities for savvy buyers. Owners of 12-14 year old cars in good condition are often willing to sell at significant discounts just to avoid the fitness test hassle. If you find a well-maintained vehicle with a clean service history, the reduced price could represent excellent value.
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Green Tax and Compliance Costs
Beyond the fitness test, owners of older vehicles face additional financial burdens in the form of green tax — an environmental surcharge levied on vehicles beyond a certain age. While green tax rates vary by state, the structure typically follows a tiered model based on vehicle age and type.
| Vehicle Age | Green Tax (Personal) | Green Tax (Commercial) | Fitness Test Frequency |
|---|---|---|---|
| 0-8 years | Nil | Nil | Not required |
| 8-10 years | Nil | 10-15% of road tax | Every 2 years (commercial) |
| 10-15 years | 10-15% of road tax | 25-50% of road tax | Every year (commercial) |
| 15+ years | 15-25% of road tax | Mandatory scrappage | Every year + automated test |
For a 15-year-old mid-size sedan in Maharashtra, the combined annual cost of green tax, fitness test, and insurance can easily exceed Rs. 15,000-20,000 — a significant amount when the vehicle itself may only be worth Rs. 1-1.5 Lakh. This cost calculus is what the government is counting on to drive voluntary scrappages.
State variation: Green tax rates and implementation timelines vary significantly across states. Delhi, Maharashtra, Karnataka, and Gujarat have been the most proactive. States like Bihar, Jharkhand, and several northeastern states are still in early stages of implementation, giving vehicle owners in those regions a longer runway.
Road Ahead: 2026 Targets and Beyond
The government's 5 lakh annual target for 2026 is ambitious but achievable given the current trajectory. In 2025, approximately 3 lakh vehicles were scrapped through official channels — a significant jump from under 1 lakh in 2024. The acceleration is being driven by the enforcement of mandatory fitness tests, expanded scrapping infrastructure, and growing awareness among vehicle owners.
Looking further ahead, the Ministry has outlined a vision to scrap over 10 lakh vehicles annually by 2028, which would make a meaningful dent in India's estimated 1.2 crore end-of-life vehicles. The environmental impact is substantial — scrapping 5 lakh old vehicles and replacing them with BS-VI compliant alternatives is estimated to reduce vehicular emissions by 25-30% in the affected vehicle age category.
Digital Integration
Parivahan portal now links fitness test results, scrappage certificates, and new vehicle registration in a single digital workflow
Steel Recycling
Each scrapped car yields 800-1,000 kg of recyclable steel, reducing India's scrap steel import dependency
EV Transition Link
Government considering enhanced incentives when scrappage certificate is used toward EV purchase
Employment Generation
The scrapping ecosystem is projected to create 35,000+ direct jobs by 2027 across facilities and testing centres
Policy watch: There are ongoing discussions about reducing the personal vehicle scrappage age from 15 years to 12 years for vehicles registered in high-pollution zones like Delhi NCR. If implemented, this could significantly expand the pool of vehicles requiring mandatory fitness tests and accelerate the scrapping timeline.
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Frequently Asked Questions
Not exactly. The policy mandates a fitness test for personal vehicles older than 15 years. If your vehicle passes the automated fitness test, you can continue driving it after paying the applicable green tax and renewal fees. However, vehicles that fail the test must be scrapped at a registered facility. The costs of compliance are designed to make scrapping the more practical option for most old vehicles.
The Registered Vehicle Scrapping Facility will pay you approximately 4-6% of the vehicle's original ex-showroom price as scrap value. Additionally, you receive a Certificate of Deposit that entitles you to up to 25% road tax rebate and registration fee waiver on a new vehicle. Several manufacturers also offer Rs. 15,000-50,000 in additional discounts. Total benefits can range from Rs. 50,000 to Rs. 1.5 Lakh depending on the vehicle and state.
The Ministry of Road Transport maintains an updated list of Registered Vehicle Scrapping Facilities on the Parivahan portal (parivahan.gov.in). Major operators include CERO (Mahindra-MSTC) with centres in Greater Noida, Chennai, and Pune, as well as Global AutoTech and GreenStar Recycling. Currently over 90 facilities are operational across India, with the highest concentration in Maharashtra, Gujarat, and Uttar Pradesh.
Selling sooner is generally advisable. Used car prices for vehicles approaching the 15-year mark are declining as buyers factor in limited remaining usable life. A 12-year-old car today still has reasonable resale value, but waiting 2-3 more years will push it into the scrappage zone where demand drops sharply. List your vehicle now on VahanBazaar to get the best possible price while the market still favours sellers in this age bracket.
Yes, the scrappage policy applies to all motor vehicles including two-wheelers, three-wheelers, cars, SUVs, and commercial vehicles. The age thresholds remain the same — 15 years for personal vehicles and 10 years for commercial vehicles. However, enforcement has been primarily focused on four-wheelers and commercial vehicles so far, with two-wheeler compliance expected to ramp up from 2027 onward.