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Issues with Scrap Car Recycling Markets that are Unregulated

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In most emerging economies, Scrap Car Recycling Markets are highly unregulated. These unregulated markets lower the dismantling capacity as well as metal recycling costs. Due to various constraints and fluctuations in scrap supply, the end of life vehicle recycling here remains irregular. Such markets do not lack competition as there are less entry and exit barriers. In fact, in this informal business line, any scrap car dealer can easily step in or out of the market. This decision is influenced by one major factor – profitability. 

A scrap car dealer in the unorganized sector dismantles the scrap vehicle to trade it as a commodity. Their focus is to deal with the scrap parts, make money and keep going on and on in the same cycle. During the loss-making time, they bail out easily with zero accountability towards anything. For such scrap vehicle dealers, the serious environmental concerns don’t matter much. But for us, mother nature stands first. Scrap car recycling isn’t just a profit-making business; in fact, it accompanies great responsibilities. 

We always want our fellow citizens of India to make wise decisions while dealing with their scrap vehicle. So SYI is here yet again to share an important piece of information. Today let’s know together the issues with unregulated scrap car recycling markets. 

Reasons why Unregulated Scrap Car Recycling Markets are Problematic

It is no secret that vehicle scrapping in India has been unregulated for a long time. However, now the situation is improving. The future of metal recycling seems bright and prosperous, but the main hurdle restricting this growth is unregulated end of life vehicle recycling markets. Some prominent reasons for such hindrances are listed below. Have a look yourself. 

Less Regulatory Restrictions

Especially in developing sectors, locals still don’t know how to deal with their junk cars. Often the old, rusted vehicles are left abandoned or sold to random scrap dealers. These buyers do offer money in return. But a catch is that they do not deal with your scrap vehicle appropriately. They treat it just like any other junk and earn their share of profit by selling your car parts further. With fewer regulatory restrictions, they make easy money but harm the environment. They don’t provide the scraping certificates that can be beneficial for you in many ways. You would never know if your vehicle was actually dismantled and sent for metal recycling. It could be used for illegal activities. You could land in grave trouble as the vehicle bears registration details under your name. 

As per the policy for vehicle scrapping in India, there are specific rules and regulations that need to be followed. A scrap vehicle needs to go through the fitness test first. If declared unfit, one can’t run those vehicles on the road. Authorized facilities then come into the picture. They take care of every aspect of the scrapping process – from dismantling various parts to end of life vehicle Recycling. This process also includes deregistration of your old vehicle and availing you of the required vehicle scrapping certificates. 

Such is the distinction between unregulated and regulated scrap car recycling markets.

No Environmental Scrutiny

Your scrap vehicle poses a huge threat to the environment. Yes, you read that right. As per the policy for vehicle scrapping in India, environmental laws should be strictly followed. However, in unregulated markets, any scrap car dealer does not care about the environment. 

With no one monitoring their activities closely, they are not held accountable for harming mother nature. They are also less cautious about the end of life vehicle recycling or any such aspects. Often, piles of hazardous substances are seen lying here and there in the open. 

No regulations and no definite unit assignment to dispose of dangerous substances makes these scrap dealers do what they like. Their sole goal is to earn profits, which is more than enough for them. 

No Hazardous Waste Management

Dealing with scrap vehicles is not a cakewalk. For a reason, rules and regulations have been laid for vehicle scrapping in India. One of them being – appropriate management of hazardous waste. But in the unregulated scrap vehicle markets, no such precautions are taken. Everyone puts their share of profit into their pockets and cares no more. But by being irresponsible, they put you, your loved ones, flora, fauna, etc., in danger. How? Well, the answer is below.

A scrap vehicle contains various hazardous chemicals that can deteriorate the health of humans, animals, and the surrounding environment. Seepage of harmful chemicals like fluids, acids, oils, coolants into the ground contaminates it. This contamination further spreads to water bodies – threatening the aquatic ecosystems. Rather than being recycled, the toxic parts are left exposed in landfills. Often, the tires of a scrap vehicle catch fire when left exposed. Thus the air is contaminated as well. The conclusion is that one irresponsible act leads to the deterioration of multiple aspects of ecosystems that coexist together!

Limited Access to Appropriate Infrastructure and Financial Assistance

The unregulated, informal scrap car recycling market consists of scrap dealers, traders, dismantlers, recyclers, and so on. Even though this sector has specialized people to deal with different aspects, there are some key challenges. One of them is space crunch. This is a significant obstacle because spaces with limited land boundaries are no longer considered compliant scrap centers as per the new regulations. Scrap car recycling can’t be just done anywhere and everywhere. Small spaces make it difficult to ensure that metal recycling processes provide safety for humans and the environment.

Smaller spaces also restrict these scrap dealers from expanding their business. Not only that, limited access to technical and financial assistance further adds to the problem.

Other Reasons

1] In unregulated scrap car recycling markets, implementing the new guidelines can prove to be challenging. 

2] Where the monitoring is less stringent, junk vehicles would be piled up – leading to severe yet unnoticeable consequences. Tracking and locating such vehicles is not easy. 

3] With no strict regulations, discarded junk vehicles are often given a makeover. They are introduced on the roads again – with a new chassis number, engine, or forged registration.

4] The new, strict norms pertaining to regulated scrap car recycling markets could be too hard to implement. Existing unregulated players could oppose it when it comes to drastically upgrading their processes and facilities. 

5] The working conditions of such metal recycling centers are not up to the mark. Laborers in such facilities ultimately end up with severe symptoms that are detrimental to their health. In an unregulated market, a scrap car dealer gets a huge margin, but their employees hardly make enough to survive. 

We hope you have understood by now how unregulated scrap car recycling markets are problematic. But trust us, all scrap dealers aren’t the same. So do not fear if you wish to scrap your car as regulated market players cautiously scrap old vehicles. SYI is one such player, and we follow the mandatory guidelines. 

How can Scrap Yard India Help?

We thought that answering some common FAQs is the right way to help you. Here are some answers to the intriguing questions that you may have.

Q: Does a Scrap Car Dealer only accept vehicles that are in good condition?

A: No, it’s not true. A legit Scrap Car Dealer like Scrap Yard India will accept your vehicle even if it’s not in very good condition. SYI offers a “Free 30-Second Vehicle Evaluation Tool.” It will help you get the right estimation depending on the state of your scrap vehicle.

Q: To scrap a vehicle, do you need to visit the respective Scrap Car Dealer physically?

A: No, nowadays, it’s not necessary. The world has gone digital, and the scrap vehicle business is no exception. Scrap Yard India gets the entire process streamlined for you online. From the comfort of your home, you can bid goodbye to your old companion – your scrap vehicle.

Q: What is a profitable way to sell car for scrap?

A: Some junk yards offer cash for your scrap vehicle. However, you will have to negotiate to get the desired amount. Don’t want to go down that road? Well, there are many tools available online. Scrap Yard India has the best and the simplest tool that will fetch you what your scrap vehicle truly deserves!

Q: For how long do you get to keep your private scrap vehicle running on the road in India?

A: As per India’s New Vehicle Scrappage Policy, a private vehicle older than 15 years needs to go through a fitness test first. Failure in the test will make it mandatory for the scrap vehicle owner to discard it, i.e., have it scrapped.

Q: Do you get any proof after the scrap car dealer completes the scrapping process for your vehicle?

A: Yes, you do get the desired proof. An authorized scrap car dealer like SYI will provide you with the Certificate of Deposit, Certificate Vehicle Scrapping. You can use these to claim the incentives, rebates, etc.

If you have more questions, contact our team to get them answered. 

A message from SYI’s team – Reduce, Recycle, Repeat!!!


Scrap Car Recycling, Metal Recycling, End of Life Vehicle Recycling, Scrap Vehicle. Vehicle Scrapping in India, Scrap Car Dealer


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