Buying a new car without scrapping an old one? A CoD could get you registration, road tax and manufacturer benefits

Buying a Certificate of Deposit (CoD) from someone who has scrapped an eligible old vehicle could help new-car buyers without an old vehicle save thousands of rupees through registration fee waivers, road tax concessions and manufacturer discounts, Business Standard reported on Monday.

A CoD is issued by a registered vehicle scrapping facility (RVSF) and can be transferred to another buyer. It can be used to claim applicable benefits when purchasing a new vehicle.

This has created a small secondary market for CoDs through the formal DigiELV platform as well as dealers and informal networks.

"If you are looking to buy a new car this year, the CoD gets you a 10-12 per cent discount on the car. The certificate of deposit is being sold in the black market for as much as Rs 20,000," a car dealer told Business Standard on condition of anonymity.

What benefits can you get?

The central vehicle scrappage framework provides for a registration fee waiver, motor vehicle tax concessions and manufacturer discounts, depending on the state, vehicle and manufacturer.

Motor vehicle tax concessions can be up to 25 per cent for non-transport vehicles and 15 per cent for transport vehicles, subject to state rules.

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DigiELV, which is integrated with the VAHAN system, allows valid CoD holders to sell their certificates and buyers to acquire them. The government has recognised that CoDs can be traded.

Does buying a CoD make financial sense?

Suppose you are buying a ₹10 lakh car and purchase a CoD for ₹10,000.

If the certificate gives you a ₹1,000 registration fee saving, ₹20,000 motor vehicle tax saving and ₹15,000 manufacturer discount, your total benefit would be ₹36,000.

After paying ₹10,000 for the CoD, your net saving would be ₹26,000.

NITI Aayog’s report says 71,196 CoD trades had been recorded on DigiELV as of September 1, 2025. Of these, 69,390 were for light motor vehicles/non-transport vehicles, with an average trade price of ₹10,814. Across all categories, the average trade price was ₹10,634.

In 2024, passenger vehicle manufacturers covering about 98 per cent of the market agreed to discounts of up to 1.5 per cent of the ex-showroom price or ₹20,000, whichever is lower. Mercedes-Benz offered ₹25,000.

However, NITI Aayog has noted that tax concessions are not uniform across states. The actual benefit from a CoD therefore depends on the state, vehicle and manufacturer.