Scrapping an old car is usually seen as the end of its road. But if you hand it over to an authorised scrapping facility, you may get more than the money paid for its scrap metal. The process can also give you a Certificate of Deposit, which has value when you or someone else buys a new vehicle.
You have two options once you receive the certificate. You can use it to claim eligible benefits on a new vehicle, or sell it to another buyer through the official trading platform. Here's how a CoD works, how much you could save and what to check before buying or selling one.
What Is a Certificate of Deposit (CoD)?
A Certificate of Deposit (CoD) is a digital document issued through the VAHAN vehicle scrapping system when you hand over an eligible vehicle to a Registered Vehicle Scrapping Facility (RVSF). It acts as proof that your vehicle has been accepted for scrapping and can be used to claim applicable benefits on a replacement vehicle.
The certificate is not the same as the money you receive for the scrap metal. The RVSF pays you an agreed amount for the old vehicle, while the CoD gives you access to eligible incentives when purchasing another vehicle. You can also trade the certificate if you don't need those benefits yourself.
You can access the government’s Voluntary Vehicle Scrapping Portal to find scrapping-related services and manage the certificate.
CoD vs Certificate of Vehicle Scrapping: What's the Difference?
These two documents serve different purposes, so don't confuse them.
| Document | What it means |
| Certificate of Deposit (CoD) | Confirms that the vehicle has been deposited for scrapping and can be used to claim eligible purchase incentives. It can also be traded. |
| Certificate of Vehicle Scrapping (CVS) | Issued after the scrapping process is completed. It serves as proof that the vehicle has been scrapped. |
The CoD is the document you need for the financial benefits discussed in this article. The CVS is proof of the completed scrapping process.
What Benefits Can You Get With a CoD?
A CoD can help reduce the cost of a new vehicle in three main ways: a road tax concession, a registration fee waiver and a manufacturer discount. The amount you actually save depends on where you register the new vehicle, its category and the manufacturer's current offer.
| Benefit | What you could save |
| Road tax concession | Up to 25% for non-transport vehicles and up to 15% for transport vehicles under the central framework, subject to applicable state rules |
| Registration fee waiver | The eligible registration fee may be waived when the vehicle is registered against a valid CoD |
| Manufacturer discount | Depends on the carmaker and its scrappage offer. Some passenger vehicle manufacturers have offered 1.5% of the ex-showroom price or ₹20,000, whichever is lower. |
These benefits aren't all guaranteed in every state or for every car. Before booking a vehicle, ask the dealer and the relevant RTO which concessions apply to your purchase.
1. Road Tax Concession
Road tax can be a sizeable part of your new-car bill. Under the central vehicle scrappage framework, the concession can be up to 25% for non-transport vehicles and up to 15% for transport vehicles.
However, states decide how the concession is implemented. The calculation may depend on the state notification, vehicle category and applicable tax rules. So, don't assume that you will automatically get 25% off the road tax on your new car.
2. Registration Fee Waiver
A valid CoD can also make you eligible for a waiver of the applicable vehicle registration fee under the relevant rules. The saving is usually smaller than the road tax concession, but it still reduces the upfront cost. Ask the dealership to show this benefit separately in the on-road price calculation so you can see whether it has been applied.
3. Manufacturer Scrappage Discount
Some carmakers offer an additional discount to buyers who provide an eligible scrappage certificate. The amount and conditions vary by brand, model and offer period.
For example, a manufacturer may offer a discount calculated as a percentage of the ex-showroom price, subject to a maximum amount. This is separate from the road tax concession and registration fee waiver.
Don't rely on a general online figure alone. Ask the dealership for the current offer in writing and check whether it applies to your chosen model and variant.
4. Money From the Old Car's Scrap Value
When you hand over your vehicle to an RVSF, the facility pays the agreed scrap value separately from the CoD benefits. The amount depends on factors such as the vehicle's weight, material recovery and the offer made by the facility. This payment is for the old vehicle itself. It isn't a discount on the new car, so keep it separate when calculating your total savings.
How Much Can You Save With a CoD?
Let's say you're buying a new car with an ex-showroom price of ₹15 lakh. For illustration, assume the standard road tax in your state is 12%, and the applicable CoD concession is 25% of that tax.
| Cost or benefit | Amount |
| New car's ex-showroom price | ₹15,00,000 |
| Standard road tax at 12% | ₹1,80,000 |
| Road tax saving at 25% of the tax | ₹45,000 |
| Illustrative manufacturer discount | ₹20,000 |
| Illustrative registration fee saving | ₹1,000 |
| Total illustrative savings | ₹66,000 |
In this example, the CoD-related benefits add up to ₹66,000. If you also received ₹30,000 for your old car's scrap value, the combined value would be ₹96,000.
These figures are only an example, not a guaranteed offer. The actual tax concession, manufacturer discount and registration fee saving could be different. Get the figures confirmed for your state and vehicle before making a decision.
How to Use Your CoD When Buying a New Car
If you're planning to replace your old car, using the CoD yourself may be the simplest option. Here's how the process generally works.
- Scrap your old vehicle at an RVSF: Submit the vehicle and required documents through the authorised scrapping process. The facility verifies the vehicle details and issues the CoD through the VAHAN system.
- Access your certificate: Visit the VAHAN Voluntary Vehicle Scrapping Portal and use the available certificate services to view or manage your CoD.
- Check the benefits before booking: Ask the dealership and RTO which road tax concession, registration fee waiver and manufacturer discount apply to your new vehicle.
- Share the CoD details with the dealer: Provide the certificate details needed for verification and registration. The dealer can guide you through the applicable process.
- Check the final invoice: Make sure each eligible benefit has been applied correctly. Don't assume the full discount has been included just because you submitted the certificate.
Keep the CoD details handy and check its validity before starting the purchase process. If the certificate has expired or the new vehicle does not meet the applicable conditions, you may not be able to claim the benefits.
How to Sell Your CoD on DigiELV
You don't have to buy another car just because you've scrapped your old one. If you don't need the certificate, you can sell it to someone who wants to use it for an eligible vehicle purchase.
The government-integrated DigiELV trading platform lets certificate holders list their CoDs and receive offers from interested buyers.
Step 1: Log in to DigiELV
Open DigiELV and register or log in using the required details. If you started the process through VAHAN, use the mobile number linked to your vehicle record where required.
Step 2: Find your active CoD
Once you're logged in, check the active certificates linked to your account. Make sure the certificate is valid and that the details are correct before listing it.
Step 3: Create a selling offer
Go to the relevant section for active CoDs and create a sell offer. You can quote a price and provide the bank details required to receive payment.
The offer remains active for the period set by the platform. DigiELV's published guidance currently states that offers are valid for seven days, after which you can make another offer if needed.
Step 4: Review the buyer's offers
Check the offers received for your certificate. You can review the bids and allocate the certificate to a buyer according to the platform's process.
Don't transfer the certificate through an informal arrangement based only on a promise of payment. Use the official process so the transfer and transaction are recorded.
Step 5: Complete the transfer and receive payment
After a successful trade, the transferred certificate is made available to the buyer. DigiELV states that payments are generally credited to the seller's registered account within 24 to 48 hours after the trade is completed successfully.
Check the platform's current charges before accepting an offer. Its published FAQ states that a fee of 3% of the trade value plus applicable GST is charged for the first sale of a CoD. Charges and eligibility conditions can change, so confirm the latest details on the DigiELV FAQ page.
How to Buy a CoD on DigiELV
You can also buy a CoD if you're planning to purchase a new car but don't have an old vehicle to scrap yourself. The certificate may help you access eligible benefits, but buying one only makes financial sense if the savings exceed its purchase price and any applicable charges.
Step 1: Check your potential savings
Before placing a bid, ask your dealership or RTO to estimate the benefits available for your new vehicle. Check the road tax concession, registration fee waiver and any manufacturer discount you may qualify for.
Step 2: Register on DigiELV
Visit the DigiELV portal and complete the registration process. Follow the platform's instructions for account verification and access to the trading service.
Step 3: Browse certificates and place a bid
Open the available offers and check the certificate details. Select an appropriate listing and place your bid. DigiELV's published guidance says buyers need to deposit the full bid amount as a margin before placing a buy order.
Step 4: Complete the purchase
If the seller allocates the certificate to you and the trade is completed, the transferred CoD should appear in your account. Check the certificate details and validity before proceeding.
Step 5: Use the certificate for your new vehicle
Give the certificate details to the dealership and follow the required registration process. Confirm that the certificate qualifies for the benefits you calculated before buying it.
Remember: a CoD doesn't guarantee a fixed discount. The state, vehicle category, certificate validity and manufacturer offer all affect its value.
Important Rules to Check Before Using or Trading a CoD
A certificate can lose its value if you overlook its validity or assume that every benefit applies to every vehicle. Check these points before you commit.
1. Check the two-year validity period
Under the 2022 amendment to the vehicle scrapping rules, a CoD is valid for two years for claiming incentives on a new vehicle. Check the issue and expiry dates on your certificate rather than relying on an estimate.
Manufacturer discounts may have their own conditions or time limits. Confirm those separately with the carmaker or dealer.
2. Check your state's road tax rules
The central framework provides for concessions of up to 25% for non-transport vehicles and up to 15% for transport vehicles. But the actual concession depends on the applicable state rules.
Ask for the estimated saving in rupees, not just the maximum percentage. That will help you decide whether buying a CoD makes sense.
3. Confirm that the certificate suits your new vehicle
Don't assume that any certificate will work for any vehicle. Eligibility can depend on the vehicle category and the rules applicable to the new registration.
Before buying a CoD, confirm with the dealer or RTO that the certificate can be used for the exact vehicle you intend to purchase.
4. Check the vehicle's records before scrapping
The RVSF will verify the vehicle's details and records through the required process. If your vehicle has outstanding finance, an unresolved ownership issue or other restrictions, check with the RVSF and RTO what needs to be resolved before scrapping.
Clear any pending requirements before handing over the vehicle. This can help prevent delays in completing the process and receiving your certificate.
5. Use the official trading platform
If you want to sell or buy a CoD, use the official DigiELV process and review its current fees, payment requirements and eligibility conditions. Avoid informal transfers where payment and ownership of the certificate are not properly recorded.
Is Selling Your CoD Better Than Using It Yourself?
That depends on what you plan to do next. If you're buying a new car soon, using the certificate yourself may be worthwhile if the eligible tax concession, registration fee waiver and manufacturer discount add up to a meaningful saving. Ask the dealer to calculate the benefits before you decide.
If you aren't planning to buy another vehicle, selling the certificate can let you receive money for a benefit you would otherwise leave unused. The price you get depends on buyer demand, the certificate's validity and the trading platform's conditions.
If you're buying a CoD from someone else, do the same calculation from the other side. Add up the benefits you can actually claim, subtract the certificate's purchase price and applicable fees, and check whether the remaining saving is worth it.
Verdict: Make Your CoD Work for You
A Certificate of Deposit gives an old vehicle a second financial use after it has been handed over for authorised scrapping. You can use it to claim eligible benefits on a new vehicle or sell it through DigiELV if you don't need it yourself.
But don't treat the certificate as a coupon with a fixed value. The road tax concession depends on state rules, manufacturer discounts vary, and the certificate has a limited validity period. Check the figures with your dealer or RTO before making a decision.
If you're scrapping an old car, keep the CoD safe and check its expiry date. If you're buying one, calculate the actual savings first. That way, you can make a decision based on what the certificate will really save you, rather than the biggest discount someone promises.
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