Car Scrapping Charges and Fees in India Explained

It’s better to scrap an old car that is not running properly, especially if its RTO registration has expired. If you cannot re-sell it or it cannot be fixed, scrap the car and get some value from the scrap.

Now the question arises, how much will it cost? Will there be any government tax? Will there be any exemption? In this blog, we have explained the car scrapping charges in India and have suggested ways to reduce them wisely.

What is Car Scrapping?

Car scrapping means officially discontinuing an old, useless, or unfit vehicle as per the rules set by the Government of India (GOI). It involves procedures like dismantling the parts and then recycling them after separating them into pieces.

You must have seen that many vehicles are gathering dust on the roadside or rusting in the garage. Such vehicles not only increase pollution but also acquire unnecessary space on the roads and garages. That is why the government has created a fixed process so that such vehicles can be scrapped properly.

Importance of Vehicle Scrapping Policy

The GOI implemented the new scrapping policy in 2021. The purpose was to reduce pollution, increase road safety, and give new energy to the auto industry.

Now, if your car is older than 15 years (or commercial vehicle is older than 10 years) and it does not pass the fitness test, then scrapping is the only safe and legal way. Also, after scrapping, you also get a Certificate of Deposit (CoD) which proves to be useful for you in the future.

Components of Car Scrapping Charges

When you think of scrapping, there are many small expenses involved. Let’s understand them one by one.

1. Vehicle Evaluation and Inspection Charges

Many scrapping companies first inspect your car irrespective of whether it is drivable or not. They also evaluate the condition of its parts. Some companies provide this service for free, but some may charge Rs. 300 to Rs. 1000 for it.

2. Towing or Pickup Charges

For vehicles that cannot be driven, towing arrangements must be made to deliver the car to the scrapping facility. Charges may vary based on the distance. Somewhere it costs Rs. 500 while somewhere it can even cost Rs. 3000.

3. RTO Cancellation Charges

When you go for scrapping, it is necessary to cancel the registration of your car at the RTO. There is no fixed fee for this, but some agents or service providers may charge Rs. 200 to Rs. 500 for this.

4. Scrapping Yard or RVSF Processing Fee

A Registered Vehicle Scrapping Facility (RVSP) can scrap your vehicle in a professional manner. In return, they charge some processing fee which can range from Rs. 1000 to Rs. 2500.

5. GST and Other Taxes

If the scrapper providing the service is registered under GST, then 18% GST can be added separately on the service charge.

Cost of Getting a Vehicle Scrapping Certificate

The costs of getting a car scrapping certificate are detailed below:

Certificate of Deposit (CoD)

When your vehicle is scrapped, you get a CoD, an important document that is used to get discounts while buying a new vehicle. Some companies provide it for free, while some may charge Rs. 300 to Rs. 500.

Certificate of Vehicle Scrapping (CVS)

This is another important document that proves that your vehicle has been duly scrapped. This has to be shown at the RTO while cancelling the registration or buying a new vehicle. Usually, this is also available for free if you have got the scrapping done from an RVSF.

Additional Expenses that the Vehicle Owner May Have to Bear

Some additional expenses that you may have to bear to scrap cars are listed below:

1. Penalty for the Expired RC

If the registration of your vehicle has expired a long time ago, there may be a late fee while cancelling the document at the RTO. This can usually be Rs. 100 per month or more.

2. Pending Challan or Tax

If there is any challan or road tax pending on your vehicle, then it is necessary to pay it before scrapping. Without paying it, further process cannot be done.

3. Cost of Getting a Duplicate RC

In case of a lost RC, securing a duplicate is the first step. The cost can range from Rs. 500 to Rs. 1,500, depending on whether you handle it yourself or hire an agent.

Who Bears the Cost of Scrapping?

To scrap cars, you need to pay some fees from your end. Some important insights in this regard are shared below:

Role of the Vehicle Owner

In most cases, the above expenses are borne by the vehicle owner. However, you get some money as scrap value based on the weight and parts of the vehicle. This makes your decision to scrap a car worthwhile.

You also get some government discounts and incentives after scrapping an old vehicle. More details about this are provided below.

Govt Discounts and Incentives

The discounts and incentives given by the government for car owners who scrap their old cars include:

1. Discount on Purchase of New Vehicle

If you show CoD after scrapping, you can get a discount of 4% to 6% on the new vehicle. This discount depends on the manufacturer.

2. Concession in Road Tax and Registration

Some state governments offer up to 15% discount on road tax and registration fees on showing the scrap car certificate.

3. Trade-In Bonus from the Company

Some vehicle manufacturers such as Maruti, Tata Motors, etc. also offer trade-in bonuses on CoD and offer additional discounts ranging between Rs. 10,000 and Rs. 20,000.

Difference in Fees According to State and City

The car scrapping fees may vary city or state-wise. Some pointers in this regard are given below:

Difference in RTO Fees

RTO fees are different in every state. This fee is usually higher in metro cities but some sort of concession can be applicable to smaller cities.

Local Transport Office Rules

Some states or cities apply their own instructions regarding scrapping. This may cause a slight difference in both the process and the cost.

How to Reduce the Cost of Scrapping?

Before scrapping a car, you may wonder if it will be more expensive than necessary. The good thing is that with a little understanding and the right information, you can complete this entire process within your budget. Let’s see some practical solutions to make it possible:

1. Get the Scrapping Done from an Authorised RVSF

First of all, keep in mind that scrapping should be done only from a government recognised scrapping center i.e. RVSF.

This facility is transparent, the charges are clear, and most importantly, they provide necessary documents like CoD and CVS for free.

On the other hand, if you get the scrapping done from an unauthorised scrapper, you do not get any discounts such as concession in road tax or discount on a new vehicle later.

2. Choose a Scrapper with Free Pickup Service

Towing or pickup charges can sometimes go up to Rs. 3000, especially if your vehicle is not running and is parked far away.

3. Pay Old Challans and Taxes in Advance

Many times, at the time of vehicle scrapping, an old challan or road tax dues appears on the RTO portal.

In this case, the scrapping process stops and you have to pay the challan immediately. The challan will include the late fees as well.

It would be better if you check the vehicle’s challan status on the Parivahan site in advance and pay the dues. This is a small step that can save you from a lot of trouble and expense later.

4. Keep RC and Other Documents Safe

If your Registration Certificate i.e. RC is lost, it is necessary to get a duplicate RC first. This can cost anywhere from Rs. 1000 to Rs. 1500.

If you keep the RC, Pollution Certificate, Insurance copy, and identity card ready, neither time nor money will be wasted.

Some people in a hurry take the help of agents who charge extra for getting the duplicate documents made. By being proactive and managing these documents on your own, you can save some money.

5. Choose the Scrapping Facility Wisely

The scrapping fee is slightly different in every city. RTO charges may be high in metro cities, but the same work can be done at a lower cost in smaller cities.

If you have a choice of two cities (e.g. your car is registered in another city), choose a city that offers a higher car scrap value.

6. Avoid Middlemen by Dealing Directly

Some people fall for scrapping agents who charge separate fees for vehicle inspection, RTO procedure, CoD extraction, etc. At Spinny, we offer a hassle-free online procedure without charging any fees for it.

Conclusion

If your car is no longer roadworthy, scrapping it is a wise decision. 

If you keep all the above-mentioned points in mind while scrapping your car, then you can save some money. So, it is time to give your old rusted car a respectful farewell and start afresh, with a new car!

FAQs on Car Scrap Charges & Fees

Q. Is car scrapping expensive?

Including costs such as towing, paperwork, and processing, you may have to spend anywhere from Rs. 2000 to Rs. 5000 for scrapping a car. Some companies also provide this service for free.

Q. Do scrappers give money for car scrapping?

Yes, you can get anywhere from Rs. 10,000 to Rs. 50,000 as it varies as per your car’s condition. This money gets credited from the scrapper directly to your account.

Q. Are CoD and scrapping certificates available for free?

Most authorised scrapping centers provide these for free. Local agents may ask for money.

Q. What if there is a challan or tax pending?

It is important to clear all pending taxes and challans before scrapping. Otherwise, the process may stop.

Q. What is the most important thing in scrapping?

Always get the scrap done from a government-recognised center, so that the paperwork and certificates are reliable.