RTO Rules for Scrapping Two-Wheelers & Cancelling Bike RC

What is the Total Loss (TL) of a Bike?

In bike insurance, the total loss of a bike refers to the situation where the repairing cost of a vehicle is more than 75% of the Insured Declared Value (IDV) of the vehicle. The IDV is the maximum amount your insurer will pay for damages or loss. If the repair cost is higher, it is considered a total loss, and the insurer will typically pay the IDV as a settlement.

The concept of a total loss of a bike does not apply to third-party bike insurance policy. The insurer will only pay the IDV for the damage caused by a natural calamity, fire, theft, or accident under the comprehensive bike insurance policy.

Therefore, the bike will be considered a total loss if the repair cost is more than 75% of the IDV. Here, the insurer will pay the IDV as the claim amount for the replacement of your bike.

What to Do in Case of Total Loss of Bike?

You can sell the remaining parts of your bike to a scrap dealer if your motor insurance company declares your vehicle as a total loss. You can easily find two-wheeler scrap dealers near you. The scrap dealer will take the remaining parts to recycle. If you are planning to scrap your two-wheeler, then you will have to cancel your bike's RC as well.

RTO Rules for Scrapping Two-Wheelers in India

As per the Motor Vehicle Act, 1988 under Section 55, it is mandatory for a bike owner to cancel the Bike's RC after scrapping.

The bike owner must inform the Regional Transport Office (RTO) within 14 days about the total loss. Then RTO will cancel the RC of the bike. Then your bike will be nothing but scrap material, and the RC will not be registered to anyone else.

The cancellation of RC will be completed only when the police send a clearance report to the RTO. Once it is cancelled, RTO will issue a non-utilization certificate for the bike within 4-5 weeks. The rules and cancellation fee will vary according to the state.

How to Find Two-Wheeler Scrap Dealers Near Me?

Finding a two-wheeler scrap dealer is easy. All you need to do is, search online on your web browser or just ask local mechanics or garages, or even check with your local RTO. When choosing a dealer, consider their reputation, location, and price. However, make sure to get proper documentation for your records.

How to Cancel RC of a Bike?

If your bike insurance company has declared your bike totaled, then you can begin the cancellation process of RC. You can follow the procedure mentioned below to cancel the RC of a bike:

• Find a two-wheeler scrap dealer near you, and sell your totaled bike to them.
• The dealer will provide you the chassis number after cutting the parts that can be recycled, and this will prove that your bike has been scrapped.
• Get an affidavit stating that your bike has been scrapped.
• Inform about this the nearest RTO.
• Submit the documents required for RC cancellation of your bike to the nearest RTO.
• The RTO will verify all those documents and obtain police clearance. Then they will cancel the RC of your bike
• Next, the report will be transferred to the original RTO where the bike got registered initially
• That original RTO will cancel the RC
• They will inform you when the RC is cancelled. After then, you will receive a non-utilization certificate for your bike from that RTO.

Mandatory Documents Required to Cancel the RC

You will have to provide the below-mentioned documents to the RTO:

• Registration certificate of the scrapped bike
• Cutting of Chassis number from the scrapped bike
• Affidavit that states the bike is scrapped
• Bike insurance policy
• PUCC of bike

Importance of Cancellation of RC in Total Loss of Bike

It is crucial to cancel the RC of the bike in case of total loss. Here are some of the reasons why you need to be extra careful when it comes to cancelling the RC of the totaled bike:

1. Prevent Misuse of Damaged Bike Documents

   In a road accident or due to any natural calamity, if the bike is damaged completely, the insurance company declares it a Total Loss (TL). As a bike owner, then becomes compulsory for you to cancel the RC of the bike.

   If you do not cancel the RC of the scrapped bike, there are chances that fraud or thieves can misuse the documents of the scrapped bike. They might give a new identity to a stolen bike or might indulge the bike in illegal activity using your documents.

2. Prevent Bike Theft

   When you sell your bike to a scrap dealer without cancelling the RC, usually, the thieves take it as an opportunity. When a thief steals a bike, they try to hide it in plain sight. They change the identity of the stolen bike with your RC, its engine number, and chassis number and then replace it with the one they stole. But if you cancel the RC, then these activities can be put to an end.

Things to Keep in Mind While Cancelling the RC

You will have to keep certain things in mind when you go for the cancellation of your bike’s RC:

• Inform your RTO within 14 days of scrapping your bike.
• Make sure you have active third party bike insurance or a comprehensive bike insurance policy for a smooth cancellation process.
• Renew bike insurance timely to be eligible for a total loss claim.

Conclusion

Cancelling your bike's RC after it's declared a total loss is essential for legal compliance and to prevent fraud. By following the RTO rules and procedures, you can ensure a smooth and hassle-free cancellation process. Remember to keep your bike insurance policy up-to-date to protect yourself financially in case of unforeseen events.