Like every other machine, vehicles come with a fixed lifespan and they also experience wear and tear over time. As the days go by, driving vehicles has become increasingly troubles some. This is due to reasons like low availability of spare parts, advances in automotive technologies, strict fuel rules, and sometimes the use of too many vehicles on the road. This is, in turn, caused by more people buying additional vehicles. This means that while owners hold on to the old vehicle, they purchase a new one thus increasing the total amount of vehicles on the road.
In February 2021, the Union budget was announced. Among other things, Indian Finance Minister Nirmala Sitharaman announced the vehicle Scrappage Policy. Does this mean you have to scrap your old vehicle? How old does it have to be? And what are the benefits of such a scheme? Does it affect the purchase of vehicle insurance online? Here is an overview of the Vehicle Scrappage Policy 2021:
What is Vehicle Scrappage Policy?
Vehicle Scrappage Policy is an official statement issued by the Government of India regarding the rules and regulations to be followed while scrapping a vehicle. Developed countries have a detailed approach in this regard. However, India has so far had no official policy.
According to recent announcements regarding the policy, old and malfunctioning vehicles that have completed their life cycle will be scrapped. It is a voluntary process but is defined by regulations. For example, older vehicles (15 to 20 years) do not have to be forcibly canceled. However, they have to undergo a fitness test after a certain period of time. * Standard T&C Apply
Highlights of Vehicle Scrappage Policy
The Indian automobile sector has been in a turbulent region since the end of 2019. The following COVID-19 pandemic exacerbated the situation. Even though post-Diwali sales in 2020 have boosted the sector to some extent, the situation remains alarming. The vehicle scrappage policy is said to help the troubled automobile sector in India. Scrapping older vehicles would mean that car owner would buy newer vehicles. This, in turn, boosts the sales in the automobile sector. Disposing of older vehicles is also good for the environment as they tend to have higher emissions. Here is a list of key points related to vehicle scrappage policy statement:
- The policy is aimed at creating a system for scraping useless vehicles in India.
- The rules and regulations are built around the actual scrapping process, which is specified in the statement made by MoRTH.
- There will be some benefits for vehicle owners on scraping old vehicles.
- Eliminating useless vehicles will help reduce air pollution to a great extent.
- People are interested in buying eco-friendly, safe and technologically advanced vehicles.
- With older vehicles gone, people will have the option of buying newer vehicles.
- This boosts automobile sales and ensures road safety at the same time.
- This would also be beneficial for other related industries such as personal and commercial vehicle insurance.
* Standard T&C Apply
Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms and conditions, please read sales brochure/policy wording carefully before concluding a sale.