Vehicle scrappage policy: Leasing is a cheaper option than buying a car on loan now

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In a bid to keep polluting and old cards off the road, finance minister Nirmala Sitharaman announced the arrival of a vehicle scrappage policy, in her Budget 2021 speech. Cars that are over 15 years old would be required to undergo mandatory emission tests. If your car fails this test, you will no longer be allowed to drive it.

Cars that are over eight years old would have to go for a fitness test. If they fail this test, you would not be allowed to drive the car on the road anymore. But if your car passes this test, a ‘green tax’ (roughly 10-25 percent) would be charged every time you renew the fitness certificate, which itself would be valid for five years. In other words, holding on to older vehicles may become a more expensive proposition. Granular details of the scrappage policy are awaited.

What is car leasing?

While leasing a car, you get to ride a brand new model from the manufacturer’s portfolio. Car companies offer lease for periods ranging from 12 to 60 months, depending on the city and model.

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