Leasing a car is the cheaper option after arrival of vehicle scrappage policy

Now, a green tax of 10-25 percent would be charged every time you renew the fitness certificate to cars that are over eight years old.

Finance minister Nirmala Sitharaman announced the arrival of a vehicle scrappage policy, in her Budget 2021 speech. Cars that are over 15 years old would be required to undergo mandatory emission tests. If your car fails this test, you will no longer be allowed to drive it.

Cars that are over eight years old would have to go for a fitness test. If they fail this test, you would not be allowed to drive the car on the road anymore. But if your car passes this test, a 'green tax' (roughly 10-25 percent) would be charged every time you renew the fitness certificate, which itself would be valid for five years. In other words, holding on to older vehicles may become a more expensive proposition. Granular details of the scrappage policy are awaited.

However, when you lease a car, you get to ride a brand-new model from the manufacturer's portfolio. Car companies offer lease for periods ranging from 12 to 60 months, depending on the city and model.

The lease is available with varied mileage options of 10,000 kms to 25,000 kms annually and 12-48-month tenures. You get Wagon R, for a monthly rent of Rs 12,513 and Ignis for Rs 13,324 in Kochi (including taxes). The lease is for a period of four years.