Get Discounts on New Cars by Scrapping Your Old One
Carmakers in India are offering discounts on new car purchases if you scrap your old, polluting vehicle. This initiative, backed by the government, aims to encourage the replacement of older vehicles with newer, more efficient models. Transport Minister Nitin Gadkari announced that automakers have agreed to provide these incentives. But what exactly does this mean for you?
Several notable car manufacturers, including Maruti Suzuki, Tata, Mahindra, Hyundai, Kia, Honda, Toyota, Volkswagen, Skoda, and MG, are expected to participate. Mercedes-Benz has confirmed a specific discount.
Discount details: the initiative and the incentives.
The process involves scrapping your old vehicle and using the certificate received to claim a discount on a new car.
Here’s a breakdown of what you need to know:
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Discount Amount: The discount is typically 1.5% of the ex-showroom price of the new vehicle, or up to ₹20,000, whichever is less. Mercedes-Benz, however, offers a flat discount of ₹25,000.
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Scrappage Timing: The old vehicle must have been scrapped within the last six months to be eligible for the discount. Scrapping it earlier will not qualify you for the offer.
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Validity: This offer is initially valid for a limited period of one year, but carmakers may extend or alter it.
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Additional Incentives:
- Scrapping centers might give you 4-6% of the ex-showroom price of the new vehicle as scrap value.
- Vehicle registration fees for the new car will be waived.
- State governments are expected to offer up to a 25% concession on motor vehicle tax.
It is important to note that these benefits mainly apply to private vehicles older than 15 years. If you intend to keep your car after this period, it will need to pass a mandatory fitness test.
The Vehicle Scrappage Policy Explained
In August 2021, the Indian government launched the Voluntary Vehicle-Fleet Modernization Program to phase out old and unfit vehicles. This policy is designed to introduce a cleaner, safer vehicle ecosystem.
Key objectives of the policy, as outlined in the handbook:
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Reduce Air Pollution: Scrapping old vehicles is expected to cut air pollution by 15-20%, supporting the goal of a ‘carbon-free nation.’
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Boost Employment: The establishment of more scrapping centers will lead to job creation.
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Enhance Safety: Newer vehicles adhere to stricter safety standards, making them safer.
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Stimulate the Economy: The demand for new vehicles will increase, thus benefiting the economy.
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Reduce Emissions: New vehicles are designed to meet modern emission standards, thereby reducing pollution levels.
These incentives from carmakers and the government’s scrappage policy collectively aim to make the process of replacing old vehicles more appealing and beneficial for consumers and the environment alike.
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