The Importance Of Scrapping A Vehicle

Recently I toured Gujarat’s first-ever vehicle scrap facility to understand the importance of scrapping a vehicle.

Although it may not seem like a big deal, or even as economically viable as selling your old vehicle, however, as it turns out, scrapping your old vehicle might actually be more beneficial in most cases, than trying to sell it.

Here are some key vehicle scrappage laws which everyone must be aware of, that are currently in place and have been proposed.

1. For starters, every private vehicle must undergo a fitness test on the 15th anniversary of their registration and upon successful testing, the registration will be renewed for five years. A new, stricter law has been proposed to cap the vehicle life to 20 years, which means, when implemented, you will have to scrap your 20 year old vehicle.

2. As for commercial vehicles, they must undergo a fitness test every alternate year, until the 8th anniversary of their registration, post which, they must be tested every year for the next seven years, before it’s forced into the scrapyard

3. If a vehicle fails the fitness test and is deemed uneconomical to repair to pass the test, it may be deregistered and scrapped.

4. A new law being proposed will also include vehicles to be scrapped based on condition, such as emissions, rather than purely age – in order to take ill-maintained vehicles off the roads.

Now that we are aware of the scrappage laws, here’s what really goes behind the scenes of scrapping a vehicle, courtesy of Scrapitt, a venture of MKP Kataria Recycling Pvt Ltd. They are Gujarat’s first government certified scrappage facility, who are legally authorised to provide you with a certificate of deposit – more on that towards the end.

This is where your old vehicle sees its final day in its current guise before getting scrapped.

As the soon-to-be-scrapped vehicle arrives, it is parked outside the building, waiting to first be washed. You may be wondering, what’s the point of washing and wasting water when it’s anyway never seeing the light of day again? The purpose of giving it a thorough clean is for safety purposes – so that the dust accumulated on the vehicle does not spread across the floor of the facility, thus, keeping it clean and a safe place to be in.

Once the vehicle has been cleaned, it goes onto the de-polluter, a process which involves the removal of all fluids like the engine oil, fuel, brake oil etc, thus, completely drying up the vehicle. Where do the fluids go? They are sent to the tanks behind this wall for recycling purposes. It doesn’t mean that the fuel, if excess, can be reused as there is a chance that fuel in the tank may have been contaminated with the lack of use over extended periods.

Post the drainage of fluids, it moves onto the next platform where all the body panels are taken out. In case you were wondering, a forklift moves these vehicles from one bay to the next. In this process, all the exterior parts like the doors, fenders, bumpers, trunk, bonnet and interior parts like the dashboard, seats, roof lining, door panels etc, are pulled out of the vehicle, reducing it to just the chassis. If the body parts are in a decent condition, they can be resold into the used spares market.

It goes onto a tilter, where the mechanical parts, such as the engine, exhaust, suspension, axle, steering column etc, are disassembled. Unlike the cosmetic parts, these parts can no longer be used, for instance, a hole must be drilled into the engine so that it can no longer be used for other applications, as the whole purpose of this exercise is to get polluting vehicles off the road. The reason why these vehicles are tilted is so that it is easier for the personnel to disassemble the aforementioned parts.

Once the vehicle has been devoid of all moving parts, it gets hull cleaned (For reference, the black Maruti Suzuki Ritz ahead of the white Ambassador in the background), the process of defouling, or anti-fouling, and removing the accumulation of aquatic life from the hull without harming the paint. In the same process, the glass panels are taken out of the vehicle, post which, it gets hulk cut into multiple pieces.

These pieces are then placed inside the baler machine, where the metal gets crushed till it turns into cubes.

This is the end result of what used to be a vehicle, getting scrapped from start to finish, for which, the entire process is said to take between 14 and 16 man hours, depending on the vehicle. Large commercial vehicles like lorries and buses may take between 28 and 30 man hours while two wheelers may take between 3 and 5 man hours.

But why should you scrap your vehicle? How does it benefit you?

As mentioned earlier, for those with a vehicle so old that it’s not worth plying on the streets, it’s wise to scrap; you wouldn’t fetch a lot more by selling – if it even gets sold, making scraping it is the obvious choice of the two, as it takes off a polluting vehicle off the road for good. Besides, vehicle safety has come a long way in India, with safety features now a basic on every vehicle, rather than a luxury

This does not even account for other benefits, which are aplenty;

1. Your vehicle gets deregistered, making it humanly impossible for it to be used, potentially for illegal activities.

2. You get a certificate of deposit, which can either be used while buying a brand new vehicle, or you can trade with anyone for cash, should you choose not to buy a new vehicle

3. You save loads of time by sending it to scrap, rather than trying to sell a vehicle on its last legs. Time is money afterall!

4. Authorised vehicle dealers have been authorised to provide a 5% discount on the ex-showroom price of the vehicle, upon receipt of the certificate of deposit.

5. Up to 25% discount on road tax for private vehicles, 15% for commercial vehicles.

It may not seem like a huge deal, however, an individual looking to scrap an old vehicle, is likely to buy a brand new vehicle as a replacement and when I did the math, it turned out that scrapping your old vehicle to buy a new vehicle could actually save you money.

How?

Let’s take the all new 2024 Maruti Suzuki Dzire as an example, to replace your 15 year old Hyundai i10.

The kerb weight of the Hyundai i10 is approximately 1000 kilograms, and at a rate of ₹25 per kilogram, which would equate to ₹25,000/- that you fetch when you scrap it, but that’s not where the story ends

Since the vehicle would be too old and not economically viable to repair and use, it would not expect to fetch more than ₹40,000 to ₹50,000 anyway.

But wait, you’re potentially gaining ₹15-25k more for selling right? You just need a little patience and you will get more money, right?

Well, not really. To begin with, selling a car this old and in this shape would be a huge challenge and consume a lot of your precious time. Remember, time is money.

Even if you do happen to sell it for more than ₹50,000, you would not receive the benefits while buying a new vehicle.

But assuming you did scrap your vehicle, you would be eligible for the aforementioned benefits.

Picture this, you visited a Maruti dealership to purchase the new Dzire ZXI+ AMT, which currently costs ₹10,13,948 ex-showroom, ort 11,31,540 on road (Surat); since dealers are expected to provide a 5% discount on the ex-showroom price, this knocks down the price to ₹9,63,251, waiving off TCS, required for vehicles costing ₹10,00,000 and above. Though I do not have an accurate calculation, I could make a bold guess that the vehicle could cost ₹10.5 lakhs on road post incentives, saving approximately ₹80,000, since there is a discount and a waiver on registration and road tax, respectively. Adding another ₹25,000 from scrapping the old vehicle itself means you practically be paying just the original ex-showroom price of your new Dzire ZXI+ AMT. I might be inaccurate in my calculations, especially since the policy varies by state, however, this should give you an idea of how much you would actually save by scraping versus selling.

But is scrapping a vehicle for everyone?

No. If you have a 15 year old vehicle which is well kept and you believe it will last another five years, it would be wiser to keep that vehicle if you are not in a financial position to buy a new vehicle, even though I am in favour of the policy if it means cleaner, safer and more modern vehicles on the roads, however, this option isn’t available to residents of Delhi-NCR, who have no choice but to part ways with their 10 (diesel) and 15 (petrol) year old vehicles.