How to Cancel a Scrapped Bike’s Registration Certificate: A Step-by-Step Guide

For many, a dream bike is the first thing they would buy when they have some money to spare. Bikes, apart from being affordable, are also easy to learn and maintain. When you buy your first bike, you must try to keep maintained in the best possible condition you can. However, unfortunate circumstances might arise where your bike is damaged beyond repair. In such situations, you might not have any other option other than scrapping it. In such situations, what happens to your bike’s registration certificate? And your bike insurance policy? Continue reading to learn more about it.

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

The heart of a bike is its engine which is a mechanical motor-operated component designed by man. There is always a degree of error to them which may cause problems. This problem can be related to the engine, gearbox, or other mechanisms. And since it is a manmade machine, it is not indestructible. Your bike could get damaged:

1. In an accident with another vehicle.
2. Because of fire caused due to faulty mechanisms.
3. During attempted theft.
4. Due to natural calamities such as floods and earthquakes.
5. Due to manmade calamities such as riots and vandalism.

While some damages are repairable, not all of them are. If you were to renew bike insurance, and were to read the policy document, you will notice a clause in the policy document that read: If your bike gets damaged, and the repairing cost of the bike exceeds 75% of your bike’s IDV, the bike is declared as a total loss. This means your bike is no longer repairable and the cost of its repairs exceeds the salvage value. In the situations mentioned above where your bike is damaged beyond repair and declared as a total loss, what should you do? A practical solution is to take your bike to a scrap dealer. Those parts that are in a good condition would be bought by the dealer. The remaining parts of the bike along with its body are torn apart by the dealer who may choose to recycle it.

What to Do in Case of Total Loss of Bike?

If your motor insurance company declares your two-wheeler as a total loss, you can sell the remaining parts to a scrap dealer. Scrap dealers can be easily found nearby and will recycle the leftover parts. Before scrapping your bike, remember to cancel its RC (Registration Certificate) as part of the process.

Steps to Cancel Bike's Registration Certificate

Even though your bike has been declared as a total loss and you have scrapped your bike, this does not cancel your bike’s registration certificate with the registering authority. You are required to inform the RTO about this and initiate the process of your bike’s registration certificate cancellation. Here are the steps:

1. Once you have scrapped your bike, get the chassis number from your dealer. Opt for a recognised and certified scrap dealer.
2. Get an affidavit to prove that you have scrapped your bike.
3. Inform the RTO where your bike was registered about the bike being scrapped.
4. Provide the documents to the RTO to back your claim.
5. The RTO will verify the documents provided by you. They will also get a police clearance certificate.
6. Once this is done, your bike’s RC will be cancelled, and the RTO will give you a non-utilisation certificate for your vehicle.

You can visit your nearest RTO as well and initiate this process. They will forward the file to the RTO where you had your bike registered.  Read More: How to Protect Your Bike in Rainy Season?

Importance of Cancellation of RC in Total Loss of Bike

When a bike is declared a total loss due to an accident, theft, or natural calamity, the process of cancellation of the Registration Certificate (RC) becomes essential. It ensures that the bike's legal status is updated correctly, preventing future complications. Here’s why cancelling the RC is important:

1. Compliance with Legal Requirements

Cancelling the RC is a mandatory process in India under the Motor Vehicles Act. When a vehicle is considered unfit for use, its registration must be cancelled to maintain compliance with legal standards.

2. Prevention of Fraudulent Activities

If the RC is not cancelled, the bike could potentially be misused for illegal activities or sold unlawfully. Cancelling the RC ensures that the vehicle’s ownership record is closed and cannot be exploited.

3. Insurance Claim Settlement

For total loss claims, insurance companies require the owner to cancel the RC before the claim can be settled. This serves as proof that the bike is no longer roadworthy and that the owner has completed the necessary formalities.

4. Avoidance of Future Liabilities

If the RC is not cancelled, the owner remains legally responsible for the bike. Any future incidents involving the vehicle, such as accidents or fines, could still be traced back to the owner. Cancelling the RC eliminates this risk.

5. Recycling and Disposal of the Bike

Cancelling the RC allows for the proper recycling or disposal of the bike. Scrapped vehicles can then be dismantled responsibly, ensuring that environmental regulations are followed.

Documents required for the cancellation

You are required to provide the following documents to have your bike’s registration certificate cancelled:

1. The original RC of your bike.
2. The cut-out part containing your bike’s chassis number.
3. An affidavit which mentions your bike’s scrapping.
4. Your bike insurance policy.
5. Your bike’s PUC certificate. 

What happens to the insurance policy?

When your bike gets damaged in an accident, you would file a claim. During the inspection, if the repair cost of your bike is 75% or more than your bike’s insured declared value, your insurer will declare it as a total loss. After your bike has been declared as a total loss, your insurer will pay-out the IDV as compensation. Either your insurer might cancel the insurance policy automatically after this or you might need to inform them after you have scrapped your bike and cancelled its RC. Discuss this with your insurer in detail. * 

Things to keep in mind While Cancelling the RC

1. It is mandatory as per Section 55 of the Motor Vehicles Act of 1988 to cancel your bike’s registration certificate.
2. If your bike has been declared as a total loss, you need to inform the RTO about it.
3. Ensure that you get the part containing your bike’s chassis number from your scrap dealer.
4. Make sure your policy is operational. 

Conclusion

Getting your vehicle scrapped and cancelling its registration might help you avoid legal hassles that could arise with its misuse. If your bike is still in a good condition, buy insurance to get proper financial compensation after an accident. Before you purchase the policy, you can use a bike insurance calculator to get quotes based on your requirement. Read More: Own Damage v/s Third Party Cover Under Bike Insurance

FAQs

1. Can I cancel the RC of a bike that still has an active loan?

No, you cannot cancel the RC unless you clear the loan and obtain a No Objection Certificate (NOC) from the financer. This ensures there are no pending liabilities on the bike.

2. What is the significance of a scrapping certificate in this process?

A scrapping certificate is proof that the bike has been dismantled in compliance with government regulations. It is a mandatory document for canceling the RC as it confirms the vehicle is no longer operational.

3. Is there a fee for canceling the registration certificate?

Yes, there may be a nominal fee for the RC cancellation process, depending on the RTO. Contact your local RTO for specific details about the charges.

4. How long does it take to cancel the registration certificate of a scrapped bike?

The process can take anywhere from a few days to a couple of weeks, depending on the efficiency of the local RTO and whether all required documents are in order.

5. Can I cancel the RC of a bike registered in a different city?

Yes, but you may need to provide additional documents such as an NOC from the RTO where the bike was originally registered. * Standard T&C apply Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.