A majority of vehicle owners want the scrappage criteria under the government’s vehicle scrappage policy to be based on kilometres covered by the vehicle rather than its age, according to a new survey by LocalCircles.
The vehicle scrappage policy was announced in August 2021. It proposes de-registration of private vehicles after 20 years if they are found unfit or their registration certificate is not renewed, and that of commercial vehicles after 15 years in case of failure to get the fitness certificate.
“The majority of consumers are not happy with some of the criteria laid out in the vehicle scrappage policy. Seven times as many vehicle owners want vehicle scrappage criteria to be based on kilometres run rather than the age of the vehicle,” the survey said.
It noted that a large number of owners have vehicles that are older than 10 or 15 years but have been driven for less than 50,000 kilometres, and they are not ready to scrap such vehicles and buy new ones or incur a sizable additional cost to get their vehicles certified.
“Sixty-five percent of consumers in the survey are in favour of a tax deduction equivalent to 10% of the old vehicle’s original invoice value or 50% of road tax paid for a new vehicle purchased,” the survey pointed out.
As part of the proposed incentives under the vehicle scrappage policy, owners will get a scrap value for the old vehicle from the scrapping centre that will be approximately 4-6% of the ex-showroom price of a new vehicle. Besides, the state governments will be advised to offer a road tax rebate of up to 25% for private vehicles and up to 15% for commercial vehicles.
LocalCircles said with the current policy terms, many feel that they are stuck as it is expensive to retain an old vehicle given all the needed certifications and incentives offered are not sufficient to buy a new vehicle. According to the survey, 51% of the households that own a vehicle are willing to reduce their vehicle ownership going forward once the vehicle scrappage policy becomes enforceable.
“All in all, the government needs to take a fresh look at the vehicle scrappage policy basis of the consumer feedback received in this survey,” LocalCircles said, adding that in the case of the vehicle scrappage policy, the primary stakeholder is the vehicle owner and the government must put in all efforts possible to get their buy-in.
LocalCircles claimed that the survey received over 34,000 responses from consumers across 291 districts of India. Of the total respondents, 55% were from tier 1 districts, 32% from tier 2 and 13% from tier 3, 4 and rural districts. The findings of the survey would be submitted to the road transport and highways ministry.