Get about 5% rebate from automakers on new purchase for scrapping old car

If you are the one looking for benefits while buying a new car then using the benefits under the scrappage policy you can fulfil your wish. Union transport minister Nitin Gadkari has made an important announcement regarding the old car scrappage policy while we are still waiting for it to be announced, and this is indeed a piece of good news.

Taking advantage of the scrappage policy, you will get a 5% discount from automobile manufacturers on new car purchases if you scrap your old vehicle before opting for the new one. The voluntary vehicle scrappage policy was announced during the 2021 Union Budget by Finance Minister Nirmala Sitharaman.

Nitin Gadkari said, “There are four major components of the scrappage policy. In addition to concessions, there is a provision to levy green tax and other charges on polluting vehicles. This will require fitness and pollution testing. This requires a fitness center. The important thing is that we are working in this direction. ‘

The voluntary vehicle scrapping policy announced in the Union Budget for 2021-22 has asked for fitness test after 20 years for personal vehicles while commercial vehicles would require it after the completion of 15 years and the vehicles had to let go by the owners if they fail to pass the fitness test.  A notification in this regard will be issued soon. This rule will come into force from April 1, 2022, after the approval of the state governments.

Original equipment manufacturers (OEM) are already passing out exchange schemes, under which 2-3% discounts are being offered depending on model to model. If the 5% is a clear and complete discount then it will no doubt boost the sales benefitting the buyers but if it includes exchange bonus, scrap value and cost cuts then it may not be as benificial.’’ say, Vinkesh Gulati, President Federation of automobile dealers association(FADA).

Self-drive fitness tests will be conducted through Public-Private Partnership (PPP). The government will help private partners and state governments to set up the necessary machinery for scrap. Vehicles that fail the self-drive test will be penalized. Also, there would be provisions of green taxes and other levies on old polluting vehicles.

The central government has taken this decision to reduce the pollution of vehicles from the roads and to remove old vehicles. The ministry of road transport has given approval for scrapping old vehicles. The government has also approved the imposition of green tax on old vehicles.

The scrappage policy could be beneficial in many ways as it will help in reducing pollution and road safety. The government will boost CNG, electric vehicles on the road as an effect lower fuel consumption will take place which will help reduce oil import bills. Nitin Gadkari also mentioned that this will create a lot of employment opportunities.