Want To Keep Your Old Car? Renewal Fees Double (Not applicable for Delhi NCR)
Vehicle owners across the country now face significantly higher costs for maintaining older vehicles after the government doubled renewal fees for automobiles exceeding 20 years of age. The Ministry of Road Transport and Highways (MoRTH) finalised the Central Motor Vehicles (Third Amendment) Rules, 2025, on August 21, implementing steep fee increases aimed at encouraging the transition to cleaner, more efficient transportation.
The revised fee structure represents a dramatic shift in policy approach, moving the threshold for higher charges from 15 years to 20 years whilst simultaneously doubling the costs involved. For light motor vehicles (LMVs), including cars and SUVs, the renewal fee has increased from ₹5,000 to ₹10,000. Motorcycles now face ₹2,000 renewal costs, up from the previous ₹1,000, whilst three-wheelers and quadricycles see increases from ₹3,500 to ₹5,000.
Imported vehicles bear particularly steep increases under the new regime. Two-wheelers and three-wheelers from foreign manufacturers now cost ₹20,000 to renew, whilst imported cars face a substantial jump to ₹80,000 from the previous ₹40,000. All fees exclude Goods and Services Tax (GST), meaning actual costs will be higher when taxes are applied.
The government's decision stems from environmental concerns, with vehicular pollution contributing approximately 40% of total pollution levels across the country. Officials explained the fee hikes are designed to discourage continued use of vehicles manufactured before Bharat Stage-II emission norms were introduced, as these older vehicles contribute disproportionately to air quality degradation.
A Ministry official, speaking on condition of anonymity, stated that the revisions support the government's efforts to keep older, more polluting vehicles off roads whilst promoting fuel-efficient and electric alternatives. The policy aligns with the broader vehicle scrappage programme launched in 2021, which encourages retirement of ageing vehicles to facilitate cleaner urban transport.
The timing of the announcement proves significant, coming just days after the Supreme Court ordered authorities not to take coercive action against owners of petrol vehicles older than 15 years and diesel vehicles older than 10 years in Delhi-NCR. The court's interim relief followed Delhi government arguments that vehicle bans should consider actual usage patterns rather than manufacturing dates alone.
No Renewal in Delhi NCR
The new national rules explicitly exclude the National Capital Region, where separate restrictions remain in force. Delhi NCR continues enforcing the Supreme Court's 2018 judgment, upheld from National Green Tribunal directives, which banned petrol vehicles older than 15 years and diesel vehicles older than 10 years. These vehicles are classified as "end-of-life" and effectively barred from road use in the capital region.
The Delhi government has argued against these restrictions, highlighting the lack of scientific evidence or environmental impact assessments supporting blanket age-based bans. Officials pointed to stricter pollution control rules, wider enforcement of Pollution Under Control (PUC) certification, and nationwide adoption of Bharat Stage-VI emission norms in 2020 as evidence that newer approaches to vehicle regulation are needed.
The government warned that even BS-VI compliant vehicles could face restrictions within years without scientific justification, potentially causing undue hardship for residents whose vehicles meet current PUC standards. The Supreme Court noted historical patterns where people commonly drove cars for 40-50 years, suggesting current restrictions may be overly restrictive.
What It Means For You
The fee increases create significant financial pressure for owners of older vehicles, particularly those from middle-income households who often rely on well-maintained older cars for daily transportation. A motorcycle owner previously paying ₹1,000 for renewal now faces ₹2,000, whilst car owners see costs double from ₹5,000 to ₹10,000.
For imported vehicle owners, the burden becomes substantially heavier. A 20-year-old imported motorcycle that previously cost ₹10,000 to renew now requires ₹20,000, whilst imported car owners face the steepest increase from ₹40,000 to ₹80,000. These costs could exceed the actual value of many older imported vehicles, effectively forcing owners toward disposal.
The policy creates a deliberate economic incentive structure designed to make older vehicle ownership increasingly expensive. Combined with the vehicle scrappage policy's incentives for newer vehicles, the government is deploying both carrots and sticks to accelerate fleet modernisation.
Industry observers note the measures could particularly impact rural and semi-urban areas, where vehicle replacement cycles are typically longer due to lower usage patterns and economic constraints. Many families in these regions maintain older vehicles in good mechanical condition, using them primarily for essential travel rather than daily commuting.
Execution Will Be Key
The draft amendment was initially issued in February 2025, allowing stakeholders including automotive companies and transport organisations to provide feedback during the consultation process. Transport organisations opposed certain proposed increases for commercial vehicles, leading the ministry to put heavier vehicle fee increases in abeyance for future consideration.
The final notification applies to motorcycles, three-wheelers, quadricycles, light motor vehicles, and imported vehicles nationally, excluding Delhi NCR. Vehicles between 15 and 20 years old can still be re-registered under existing fee structures, but face the higher rates once they cross the 20-year threshold.
The policy's effectiveness in achieving environmental objectives remains to be demonstrated. Whilst higher fees may discourage some older vehicle ownership, well-maintained vehicles that pass PUC requirements may not necessarily contribute more to pollution than poorly maintained newer vehicles. Critics argue that maintenance standards and actual emissions testing provide better environmental indicators than age-based restrictions.
The used car market could experience significant disruption as older vehicles become less attractive due to renewal costs. This may create opportunities for electric vehicle manufacturers and newer car sales, aligning with government objectives to promote cleaner transportation options.
Vehicle scrappage facilities and recycling infrastructure will need expansion to handle increased volumes of older vehicles being retired. The policy's success depends partly on ensuring adequate disposal options that prevent environmental damage from improper vehicle disposal.
The measures represent part of a broader transition toward stricter environmental standards in transportation, though their implementation requires careful balancing of environmental objectives with economic impacts on vehicle owners across different income levels and geographical regions.