Govt Proposes New Renewal Fee Slabs for Cars Over 15 Years: Rates & Impact Explained

Motorists are in for a fresh pay hike as the Union government mulls revised fee slabs for renewing registration of vehicles more than 15 years old. The proposal, unveiled last week, aims to align renewal charges with a vehicle’s age, prompting consumers to rethink their ownership costs—especially those clinging on to long-serving family cars.

In the past, every vehicle owner paid a flat 1 per cent of the vehicle’s original cost to renew registration every five years, regardless of the car’s age. That meant a 20-year-old sedan attracted the same renewal charge as a five-year-old hatchback of identical ex-showroom price. While simple, this arrangement largely failed to reflect older cars’ diminishing value and escalating pollution concerns.

Under the draft rules, cars 15–20 years old will face a 3 per cent renewal fee, rising to 5 per cent for vehicles aged 20–25 years and 7 per cent beyond 25 years. These slabs aim to incentivise retirement of ageing vehicles, reduce road pollution and encourage buyers to upgrade to newer, more efficient models. Consumers who have maintained older cars for sentimental reasons or limited budgets will now weigh every rupee spent on renewal against the prospect of purchasing a modern replacement.

For car owners in metro cities—where stringent pollution norms often render older vehicles ineligible for renewal without difficult retrofits—the proposed fees could accelerate scrappage. In smaller towns, however, where alternatives may be sparse, drivers could opt to absorb the higher charges to extend their cars’ road life.

The government has opened the draft for public consultation. Advocacy groups argue the fee hike is overdue, reflecting years of leniency that kept dilapidated vehicles on the roads. Critics, however, caution that rural motorists and low-income families—who often drive decades-old utility vehicles—may be unfairly burdened.

Consumers planning to renew soon will benefit from knowing the timeline: if the proposal is finalised before their renewal date, the new slabs will apply immediately. Those with registrations due in the next few months might beat the hike by acting quickly.

Below are the current renewal fees for older vehicles:

The final decision is expected by November. In the interim, owners should assess whether shelling out a larger renewal fee makes sense or if it’s time to bid farewell to a trusty old companion.