Deciding between scrapping vs selling your old vehicle depends entirely on its age, condition, and legal status in your city.

 If your car is roadworthy, younger than 15 years (or 10 years for diesel in Delhi NCR), and requires minimal repairs, selling is almost always the more profitable option. However, if your vehicle is accidental, legally unfit to drive, or requires repairs costing more than its market value, scrapping is the financially safer and legally correct choice. With the 2026 Vehicle Scrappage Policy incentives, scrapping has become a viable way to unlock discounts on your next new car.

When Should You Sell Your Car?

Selling is the traditional route for most car owners. It is the best option when your vehicle still has life left in it and can serve another owner reliably.

1. The Car Is Roadworthy and Legal

If your car passes fitness tests and has a valid Registration Certificate (RC), it has a resale value. Even a 12-year-old petrol hatchback can fetch significantly more in the used car market than its weight in scrap metal.

2. High Market Demand

Certain models, like the Maruti Swift, Toyota Innova, or Hyundai Creta, hold their value exceptionally well. Even with high mileage, these vehicles command a premium in the second-hand market. Selling such a car to a private buyer or a dealership will always yield higher returns than scrapping.

3. You Live Outside Strict Zones

If you reside outside the National Capital Region (NCR) or other cities with strict 10 year or 15 year bans, your older vehicle still has legal value. You can easily sell a 13 year old diesel car in states like Punjab or Rajasthan, whereas in Delhi, it would be mandatory to scrap or transfer it immediately.

When Is Scrapping the Better Option?

Scrapping is no longer just for "junk" cars. It is a strategic financial move for vehicles that have become liabilities.

1. The 10 Year Diesel / 15 Year Petrol Rule (Delhi NCR)

In regions like Delhi NCR, diesel vehicles older than 10 years and petrol vehicles older than 15 years are automatically deregistered. Driving them invites heavy fines and seizure. In this scenario, selling is difficult and often illegal unless you obtain a No Objection Certificate (NOC) to move the car to another state. If an NOC is not possible, scrapping is your only legal option.

2. Total Loss or Accidental Damage

If your vehicle has been in a major accident and the cost to repair it exceeds 75 percent of its Insured Declared Value (IDV), insurance companies usually declare it a "Total Loss." In such cases, selling the wreck to a scrap dealer is safer than selling it to a mechanic who might repair it poorly and resell it illegally.

3. Expired Registration and Fitness Failure

Renewing the registration of a 15 year old car has become expensive. The "Green Tax" and increased re registration fees can cost upwards of Rs 10,000 to Rs 15,000. If your car fails the mandatory fitness test at an Automated Testing Station (ATS), you cannot legally drive or sell it. Scrapping is the only exit route.

Financial Breakdown: Scrap Value vs Resale Value

To make the right choice, you must look at the numbers. Here is a comparison of what you might earn from a typical 15 year old hatchback in 2026.

Note: The "Total Benefit" for scrapping includes the discounts you get when buying a NEW car. If you do not plan to buy a new vehicle immediately, selling usually offers more immediate liquid cash.

Government Incentives for Scrapping in 2026

The Vehicle Scrappage Policy has introduced specific benefits to encourage owners to scrap old polluters. When you scrap your car at a Registered Vehicle Scrapping Facility (RVSF), you receive a Certificate of Deposit (COD). This certificate is valuable:

• Manufacturer Discount: Car makers offer a discount of roughly 5 percent on the ex showroom price of a new vehicle when you present the COD.
• Registration Fee Waiver: You do not pay the registration fee for your new vehicle.
• Road Tax Concession: State governments offer a concession on road tax (up to 25 percent for private cars) for the new vehicle registered against the COD.

The Process: How to Sell vs How to Scrap

Knowing the steps can help you decide which hassle you are willing to handle.

How to Sell Your Car

1. Valuation: Check online portals to estimate your car's market value.
2. Documents: Ensure you have a valid RC, Insurance, and PUC.
3. Find a Buyer: List on classifieds or visit a used car dealer.
4. Transfer: This is critical. You must ensure the ownership is transferred to the buyer's name at the RTO. Risk: If the buyer delays transfer and commits a traffic violation or crime, you (the registered owner) are legally liable.

How to Scrap Your Car

1. Find an RVSF: Locate a government authorized Registered Vehicle Scrapping Facility.
2. Inspection: The facility inspects the car and offers a scrap price based on weight (approx Rs 30 to Rs 45 per kg).
3. Documents: Submit original RC, ID proof, and a cancelled cheque.
4. Dismantling: The car is environmentally dismantled. Chassis number is cut out.
5. Certificate: You receive a "Certificate of Vehicle Scrapping" and the all important "Certificate of Deposit" for future discounts.
6. Deregistration: The RVSF handles the deregistration process on the VAHAN portal. Benefit: Your legal liability for the vehicle ends immediately.

Environmental and Legal Impact

Beyond money, there is a responsibility aspect.

Selling Risks:

Selling to a "curb sider" or an unauthorized dealer often means the car is never officially transferred. It might be used for criminal activities or dumped illegally later. You remain the owner on paper, which is a significant legal risk.

Scrapping Benefits:

Authorized scrapping ensures the vehicle is recycled. Fluids (oil, coolant, brake fluid) are disposed of safely, preventing soil contamination. Steel, aluminium, and plastic are recycled, reducing the carbon footprint of manufacturing new cars. Plus, the legal closure is instant and absolute.

Conclusion

The choice between scrapping vs selling comes down to the future of the vehicle. If the car can still run safely and legally, selling puts the most cash in your pocket right now. It is the best route for cars aged 5 to 12 years.

However, if your car is an "End of Life" vehicle—meaning it is legally barred from roads, too costly to fix, or structurally unsafe—scrapping is the superior choice. It eliminates legal headaches, helps the environment, and in 2026, unlocks massive savings on your next new car purchase through the Certificate of Deposit.