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-   -   Govt: Scrap old car, get 5% rebate on new purchase (https://www.team-bhp.com/forum/indian-car-scene/234218-govt-scrap-old-car-get-5-rebate-new-purchase.html)

As per news reports, new car buyer will get about 5% rebate on a new car if he opts for scrapping the old car Link

5% is meaningless. IMO it'll infact help organise a fake scrappage certificate racket. Vehicles would continue being dismantled & sold in parts with an additional 5% incentive.

India should hold back from all the "go-green" goals until we can get a hold on the fiscal deficit.

Every percentage de-growth in GDP costs very² dearly to the people. We cannot allow ourselves be held ransom by climate activists and be made to incur costs which could otherwise feed & educate the masses.

Scrappage in a country like India is stupid to say the least IMO. Agreed that it will create a short term boom in the auto-industry and perhaps create some jobs in scrapping industry also. But there are very few policies as OVERT as this one, that try to generate revenue for others at the expense of common citizen.

On top of that - having another joke - PUC tests - and scrappage policies run in parallel is atrocious. Both can exist only if mutually exclusive IMHO. If I have a car that brings a genuinely clean PUC result - those asking me to scrap it should be criminalized to begin with. Why I'm so annoyed with this is - I somehow get the feeling that these are foundations for tomorrow to mandate scrappage without an option. Already the hilarious things like "green tax" etc on 15 year old vehicles are prevalent. Promoting scrappage is understandable to some extent (again 5% is ridiculous incentive when the next car is already going to cost a lot) - but mandating it some day would be unfair.

Can I club more than 1 scrap car toward purchase of a car?
Another question: Say I scrap a Alto against purchase a brand new Discovery, so would I get rebate around 3,45,000 (assuming Discovery costs 69L)? :)

It had to start somewhere and it has started here, even though 5% is not much incentive. As an introductory offer to incentivize more scrapping, they should have offered 7-8 %.

I sold my 12 year old Ford Ikon for 70000 and bought a Verna for 13 Lakhs. If they had offered me a rebate of 5% (65000) for my old car, I would have given it after some consideration. And if it had been 8% (1.04 Lakhs), I would have happily given the old car for scrapping without second thought.

But I still fail to understand how this 5% rebate will be calculated. If anyone plans to buy an Endeavour costing 40 Lakhs, he/she can buy the used Ikon from me for 1 Lakh and would avail a benefit of 2 Lakhs rebate (5% of 40 Lakhs) if they scrap that vehicle. :confused:

I thought the new policy allows 20 yrs for private vehicles and even after that you are not forced to scrap your car. Has anything changed or did I get it wrong? Can someone please explain the policy in simple English? :)

Edit: 5% discount will be something like X or Y whichever is lower. Don't have hopes like scrapping a nano to get 5% off of BMW X5. Something like 5% of your old vehicle ex-showroom value (inflation adjusted).

I have another question. Is the 5% rebate from new manufacturer the only payment we get or will we get some payment from scrap dealer to whom we have sold the car to?

If this is the case, then who will evaluate and set the price of the car for the price at the time of scrap? - I can assume it will be a segmented price with some guidelines, still.

Has NGT done a break-even analysis as to after how many KMs of running, a new car will emit less carbon including manufacturing + running pollution both to do better than an existing 15 year old car? I own a 2008 Honda Civic and it has completed about 95K Kms yet. In future, as WFH becomes more acceptable, I expect this car to be run even less but govt. wants me to sell/scrap it and buy a new one as if manufacturing a new vehicle is a pollution free process. When I see decisions like these taken, I start to lose hope for our country. Can't someone go to our over-zealous courts and get the NGT decision stayed/reversed?

I was expecting minimum of 20% incentive if ministry was indeed looking for a revival of sales and creating a new industry. 5% of ex showroom is meaningless, as we pay more than 15 % road tax in many states. Even if we get 5% discount on ex showroom, are we sure there is no upper limit to this incentive as the discount will be comparably huge for premium segment cars ?

May be they should consider providing 15% benefit for an EV upgrade. Can we use a old scooty to get 5% off on a car ( my jugaad mentality ) :Cheering:

If I buy a used Maruti Omni for 50,000 bucks, and scrap it to buy a Fortuner.

Will I get a 5% flat discount on the Fortuner? (and maybe some exchange benefit too :D)

In such a case, this scheme is quite attractive, but if I am scraping my Innova at 30% the resale value, and then getting the 5% off on Fortuner, then I am better off keeping both the vehicles.

If govt. had to provide an incentive for scrapping the vehicle, that should have sounded substantial enough at least.

It's more like our MoRTH telling the manufacturers that EV will be bulldozed on them in coming days, but the infrastructure for it will be readied merrily by the govt agencies, taking their sweet time. Absolutely mindless decisions and rules are coming out time and again, babus and tribunals need to understand the difference between 'research-backed-decision-making' and 'knee jerk' reactions.

Query for experts: How is the scrap value of the car calculated? For example, if I go to scrap a heavy car like an old Safari 3.0 Dicor, what value can I expect for the 2300 kilo elephant?

That shall be over and above my 5% incentive. Right?

5% incentive + Scrap value of my older car, I am feeling slightly optimistic about it. Especially for the owners of the heavier cars with poor resale value like Figo petrol, Punto Petrol, Indica, older TCIC or 3.0 Dicor Safari (I can get 1 for 1 lac now), older Corolla, older Civic, older Octavia etc. These cars hardly fetch a lac in the used car market for heavily used examples, their owners can reap a decent benefit from this scheme. Isn't it?

I believe the primary purspose was to make it more lucrative for old car owners to buy new Vs retain. With the proposed green tax working as the stick and the rebate working as a carrot, the idea must have been to get these set of ppl to buy new. Most likely looks like the work of some business consultant to Auto manufacturers who would have said, there are X close to 15 yr vehicles on road and this will lead to $ YY revenue upside and the Auto manufacturers most likely lobbied to get this going.

However I feel in its current form, it will drive up the sale of close to 15 yrs Maruti 800s so people can buy it for less than INR 50K and get a super size benefit on their 20Lakh + cars. Wouldn't be surprised if a few Fortuners, Innovas or even GLCs / GLEs are sold via this route.

This is exactly what I was thinking. Suddenly 20 year old Maruti Esteems, 800s, Zens etc would gain great demand only to be sold to whoever is going to buy a new car.
This 5% should be derived from the car being scrapped (price when it was new) and not from the new car (imagine scrapping a Maruti 800 and buying a Rolls Royce!)

It makes sense when you have a too old car, and you are upgrading to a car whose 5% is more than second hand market value of car.

For example I have an accent (12 years old), the price i am getting for this car is ~70K INR. I am buying a Compass, if this policy comes in action in next week or two I'll get rebate of 5% which is ~130K INR.

New articles say that Manufacturer is supposed to give 5% rebate (Referring to following article):

https://www.indiatoday.in/auto/lates...666-2021-03-07

"Automobile manufacturers will provide about 5 per cent rebate on new car purchases" to the consumers in lieu of scrapping of the old, Road Transport, Highways and MSMEs Minister Gakdari told PTI."

I don't understand why would manufacturer give 5% rebate? will government compensate for this rebate

They won't because the govt. is not ready to give a penny from its own pocket. I have been following this policy discussion for a while casually and initially it was proposed that scrappage rebate will only apply on buying a car of same or lower engine capacity (so you can't sell M800 to buy a Merc). Then in Nov. last year, there was a news item that manufacturers have agreed to a 1% (yes, it's an unbelievable number) rebate as sccrappage. Now we hear the 5% number. My sense is nothing concrete is coming out. Govt. will not agree to losing any revenue and in absence of that, even 2% hit would be hard for the manufacturers to take.