How Scrappage Rules 2026 Affect Used Car Prices

The Policy Framework: MV Act Section 62A, ELV Rules and the RVSF Network

The legal backbone of India's scrappage programme sits in Section 62A of the Motor Vehicles Act, 1988, inserted by the Motor Vehicles (Amendment) Act 2019, which empowers the Central Government to set rules for the End of Life of Vehicles (ELV). The MoRTH subsequently issued the Motor Vehicles (Registration and Functions of Vehicle Scrapping Facility) Rules, 2021, establishing the operational framework that took effect progressively from April 2022.

Three components make the system work in practice. First, Automated Testing Stations (ATS) — third-party facilities with standardised brake testers, emission analysers, speedometers and headlight testers — handle fitness certification. An ATS assessment is objective and automated, unlike the old Regional Transport Office (RTO) manual check. Second, Registered Vehicle Scrapping Facilities (RVSFs) are authorised centres that de-pollute, dismantle and recycle end-of-life vehicles. RVSFs are operational across 28 states as of early 2026, with more coming online through 2026-27 under the government's RVSF expansion programme. Third, the Certificate of Deposit (CoD) issued by an RVSF to the scrapping vehicle owner is the gateway to benefits — registration fee waiver on a new vehicle, concession on road tax, and state-specific scrappage incentives.

The India Automotive Recycling Market is a direct beneficiary of this policy push. The scrappage market in India is projected to reach $82 billion by 2031, according to industry estimates, as the backlog of ageing vehicles — estimated at over 50 Lakh commercial vehicles and several Crore two-wheelers and passenger vehicles past their threshold — enters the system. For used car buyers and sellers, the meaningful near-term effect is on the passenger vehicle cohorts already inside the window.

Which Vehicles Are Affected: Year-by-Year Risk Table

The scrappage thresholds are calculated from the original registration date on the RC, not the manufacturing date. Here is the current risk calendar for personal (private/non-transport) and commercial vehicles, updated as of May 2026:

How Scrappage Shrinks Old-Car Supply — and Lifts 2015–2020 Prices

The direct effect of enforced scrappage is supply-side compression. As vehicles registered before 2006 are removed from the road either through de-registration or voluntary RVSF surrender, the total pool of used cars at the cheapest end of the market contracts. This is not a sudden shock — it is a gradual, year-by-year ratchet that started meaningfully in 2022-23 and is now accelerating as enforcement infrastructure (ATS coverage and RVSF density) catches up with policy intent.

The second-order effect is the one that matters for buyers and sellers of mainstream used cars: demand for the next-oldest cohort — vehicles registered roughly 2007 to 2012 — strengthens as buyers who would have bought a cheap pre-2006 car lose that option. Some of those buyers upgrade their budget; others stay in the entry segment and compete for 2009–2012 cars instead. That demand spillover lifts price floors across the board.

The most consequential shift, however, is for the 2015–2020 model-year window. These vehicles are fully clear of the scrappage threshold (still 5-11 years from the 20-year limit) and represent the best intersection of modern safety standards (many are BS-IV or early BS-VI), reasonable mileage, and service availability. They have become the natural destination of buyers who want certainty that their purchase will not face scrappage pressure for the next decade. As more buyers reason this way, price floors for 2016–2019 petrol hatchbacks and sedans have been firming up in 2025 and into 2026, even as the broader market sees mild softening in older segments.

Delhi EV Scrappage Incentive: ₹25,000–₹35,000 Toward a New EV

Delhi has layered a generous state-level incentive on top of the central scrappage framework. Under Delhi EV Policy 2.0, announced with a ₹175 Crore outlay (approximately US$21 million), Delhi residents who scrap a BS-IV or older vehicle at an RVSF and purchase a new electric vehicle are eligible for a scrappage-linked incentive of ₹25,000 to ₹35,000. The exact amount varies by the EV category purchased — two-wheelers sit at the lower end and cars at the upper end of the range.

This is on top of the central registration fee waiver (which amounts to 25-50% of new vehicle registration cost depending on vehicle category) and the FAME II / PM E-Drive subsidy applicable to the new EV purchase itself. For a Delhi resident scrapping a 2003-2005 petrol car, the total stack of benefits — scrappage CoD, Delhi EV incentive, registration waiver, EV purchase subsidy — can effectively reduce the out-of-pocket cost of a new entry-segment EV by Rs. 60,000 to Rs. 80,000 or more. For a detailed breakdown of Delhi EV Policy 2.0 and its scrappage linkage, see our dedicated article on Delhi EV Policy 2.0 Scrappage Subsidies.

The broader implications for the used car market in Delhi are already visible. Early adopters of the scrappage-EV stack are removing pre-2006 petrol cars from Delhi roads at a faster rate than the national average. This accelerates the supply compression effect in Delhi's used car market and explains why 2016–2020 cars in Delhi-NCR are holding their value better than equivalent vehicles in cities with weaker scrappage incentive regimes. Consult the Delhi EV Policy 2026-30 Draft analysis for the full policy timeline and eligibility matrix.

How to Check If Your Car Will Be Affected

The process is straightforward and takes under five minutes. Your car's eligibility for the scrappage window — and its remaining useful life under the policy — depends entirely on two documents: the RC and the fitness certificate.

For buyers considering a used car registered before 2010, the fitness certificate check is now a non-negotiable part of due diligence. A vehicle with an expired fitness certificate cannot legally ply and cannot be sold in a normal transaction — the buyer inherits the compliance burden. Always run a VAHAN check before committing to any purchase, particularly for vehicles offered at unusually low prices. You can also look up challans, insurance status, and hypothecation through the same portal — a habit our buyers'-guide articles (like the Used Maruti Alto Buying Guide and the Used Maruti WagonR Buying Guide) consistently recommend.

Fitness Test vs. Scrappage: Is It Worth Repairing to Pass?

This is the practical question most owners of 2003-2008 vehicles are now asking. The answer hinges on repair cost versus the net benefit of surrendering to an RVSF, which in turn depends on what you are upgrading to.

The maths are clear for most owners. Unless the vehicle has collector value, strong sentimental attachment, or you have no plan to buy another vehicle, the RVSF path generates more total value. The combination of scrap weight payment, registration fee waiver and a state incentive package effectively subsidises the next purchase. For Delhi EV buyers the subsidy stack can exceed Rs. 60,000. Spending Rs. 30,000 on repairs to pass a one-year fitness test, only to repeat the process next year, is a worse financial outcome for the overwhelming majority of 2003-2008 petrol car owners.

What This Means for Used Car Buyers: Which Model Years to Target in 2026

Translating the scrappage dynamic into concrete buying advice, the 2026 used car market creates three distinct tiers for buyers:

Avoid or inspect intensely — pre-2009 vehicles (personal): These cars are within 3 years of the 20-year threshold or past it. Any purchase here is a short-hold with guaranteed compliance overhead. The only reason to buy is if the price is extremely low and you plan to run it for 12-18 months max, or if the vehicle is a specifically sought collector item. Standard buyers should skip this window entirely.

Proceed with caution — 2009 to 2013 (personal): These cars are 7-13 years from the threshold and represent genuine value at the right price. However, they pre-date the mass adoption of driver-side + passenger airbags as standard equipment. Many are BS-IV or early BS-III. Factor in likely catalytic converter, suspension, and brake costs as the car ages. A well-maintained 2012–2014 car like the Tata Tiago or early Maruti Celerio in good condition is a defensible buy — but get a pre-purchase inspection done.

Best buys — 2015 to 2020 (personal): This is the sweet spot the scrappage policy is inadvertently creating. Cars in this window are fully clear of the 20-year threshold for at least 9-14 years, carry BS-IV or BS-VI powertrains, typically have dual airbags and ABS as standard, and are within the normal service life where parts and service costs are predictable. The price premium over pre-2012 cars has narrowed recently as demand concentrates here — meaning you are now paying closer to fair value rather than a speculative premium.

The models that stand out in the 2015–2020 window for used car buyers are those with strong service networks, high production volumes (good parts availability) and proven reliability records. Our buying guides for the Used Maruti WagonR and Used Maruti Alto walk through exactly these considerations — and both models have 2015–2019 cohorts that represent some of the most cost-efficient entries into car ownership available in India today.

For broader context on how regulatory changes are reshaping the value proposition of different model years, the April 1, 2026 changes for car owners — covering toll revisions, insurance mandates and ABS requirements — is worth reading alongside this article. Together these policy shifts define the compliance landscape that both old and new used car purchases will navigate through 2030.

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