【Ultimate Guide for Beginners】4 Steps to Scrap Your Car in Hong Kong and Essential Tips | Speed Scrap

12 Nov 【Ultimate Guide for Beginners】4 Steps to Scrap Your Car in Hong Kong and Essential Tips | Speed Scrap

Cars are essential for most families today, but in Hong Kong, owning one can be very costly. Parking fees and repair costs may even exceed the car’s value, which makes selling a car common. However, the selling process is often long and complicated, so many car owners turn to faster options. As a result, car recycling services in Hong Kong (known as ‘Car Scrapping’) have become a popular choice.

Car recycling in Hong Kong is not as simple as you might think. The car scrapping industry lacks transparency, and without proper care, you could easily encounter unscrupulous companies. Not getting a good price is one thing; improper handling can lead to serious hidden problems. With years of experience in the Hong Kong car scrap business, I would like to share how to recycle your old car safely and efficiently, giving it a proper farewell.

What is Car Scrapping and Why Do People Do It?

Car scrapping (or ‘scrap car’) is a common method of recycling vehicles. Old cars are dismantled using heavy cutting and crushing machines. Usable parts are removed, repaired, and often resold overseas, contributing to environmental benefits. The remaining unusable parts are compressed into scrap metal.

Over time, as a car ages, the cost of regular maintenance and repairs increases rapidly. When these costs start to come close to the price of buying a new car, scrapping the old car becomes a practical and cost-effective decision.

Why Demand for Car Scrapping Has Soared

Recent technological advancements, especially the rise of electric vehicles, have prompted the Hong Kong government to launch the ‘One-for-One Replacement Scheme’. Many car owners are responding to environmental calls by responsibly disposing of their old cars to upgrade to electric cars. Simultaneously, major manufacturers are constantly introducing new models with improved features, fueling the desire for new purchases.

In other words, with new car models being launched every year, the number of old cars in Hong Kong keeps increasing. Besides the second-hand car market, turning to a car scrap company is a faster and more eco-friendly way to deal with old cars, making it one of the best choices.

The Car Scrapping Process: What You Need to Know

In Hong Kong, car scrapping is still not well known, and many car owners are unfamiliar with the recycling process. To avoid falling into scams, here are the key Hong Kong car scrapping procedures and important points to keep in mind.

1. The main process requires the car owner or representative to provide the scrap company with basic car information, such as photos and a description of the car’s condition.
2. The scrap company will offer a price based on the car model, and once the offer is confirmed, a handover location will be arranged.
3. In general, car scrap companies will arrange a tow truck to complete the handover process, and the payment is usually made in cash or by cashier’s check.
4. Before handing over your car to a car scrap company, check that the car is cleaned and all personal belongings have been taken out.
5. The car scrap company will provide the following documents right after the handover:

• A completed ‘Notification For Cancellation Of Vehicle Registration’ document.
• The Certificate of Destruction (commonly known as the ‘Scrap Car Paper’) must state the collection date and time, company chop, Business Registration number, company receipt, and transaction amount.

Within 15 days, the owner must take the original Vehicle Registration Document (VRC), original vehicle licence, the Scrap Car Paper, a copy of the owner’s ID, proof of address, and the completed Transport Department (TD) form TD184 to the TD to finalize the cancellation.

If your vehicle licence (registration) has more than 60 days of validity remaining, you can apply to the TD for a refund of the unused portion. The cheque will be mailed by the Treasury to the registered owner’s address, usually taking about four to six weeks.

Important Tip: If you can’t visit the TD in person, you can handle the cancellation by mail. NEVER hand over your documents to an unfamiliar third party, as they might buy the car from you at a lower price and then resell it to a legitimate scrap company for a profit!

 Common Traps to Avoid with Scrap Car Companies

Many scrap companies in the industry focus solely on the scrap car price and disregard the necessary legal procedures. Many dishonest dealers take the VRC and issue the Scrap Car Paper, but then fail to complete the official cancellation of vehicle registration.

This happens frequently. When handing your car and registration book to an agent, please make sure you have signed the TD184 form and included a signed copy of your ID card to avoid problems in the car scrapping process.

Without the car owner’s signature, the middleman cannot legally cancel the vehicle registration. The consequences of not officially cancelling your vehicle registration can be extremely serious. If the vehicle is involved in an accident due to improper disposal, the injured party has the right to file a claim against the registered owner. If the vehicle also lacks valid third-party insurance, the owner could face significant financial losses.

How to Find a Reliable Car Scrapping Company in Hong Kong?

To summarize the points above, here are four essential tips for choosing a trustworthy scrap car company:

1. Does the Company Have a Physical Scrap Yard Address?

If the company cannot provide a physical address, they might be a “middleman” rather than a genuine scrap car company. They might take your car and immediately look for a real scrap yard to process it, pocketing the price difference.

2. Can They Clearly Explain the Scrapping Procedure? 

As a car owner, you might only scrap a car once in your life. However, an experienced scrap company should offer full transparency and be able to clearly explain the entire process. If the procedures seem unclear or vague, you should think twice.

 3. Do They Use a Tow Truck for Collection? 

As mentioned earlier, normal practice is for the scrap company to arrange a tow truck. If they do not, you should be cautious.

4. Did you sign the TD184 form from the Transport Department?

In Hong Kong, the TD184 form, officially titled ‘Notification For Cancellation Of Vehicle Registration’, must be signed during the scrapping process. Vehicle cancellation is regulated by Hong Kong law. Never sacrifice your peace of mind or future legal liability for temporary convenience or a slightly cheaper deal!

Car Scrapping Price in Hong Kong 

There is no fixed reference price for car scrapping. The price usually fluctuates based on factors such as the vehicle’s model, year, mileage, licence expiry date, body/engine photos, and overall running condition. Therefore, the scrap price is subject to on-site quotation. Furthermore, some companies offer free collection for non-running vehicles and waive the towing fee, making it more convenient for customers.

Conclusion

Scrapping a car is actually quite simple: a quick phone call, a ten-minute handover in the parking lot, and a follow-up visit or mail submission to the Transport Department. As long as you choose a reputable scrap car company, you can complete the entire procedure quickly and with peace of mind.

Hong Kong Car Scrapping FAQs 

How much does car scrapping usually cost? 

Scrap car prices do not have a fixed reference, as they depend on many factors such as the vehicle’s model, year, mileage, licence expiry date, photos of the body or engine, and overall condition. Therefore, it is not possible to provide a specific price range. The final value is always based on an on-site quotation. If you are interested, the best way to know the exact price is to contact a scrap company directly for an accurate quote.

How long can I keep my car registration number (retaining a plate)? What is the procedure?

The retention of a vehicle registration number is valid for 12 months. If the applicant does not transfer the number plate to another car within this time, the Transport Department will cancel the allocation and reassign the number to another vehicle.

If the car is permanently exported or scrapped, the owner may apply to retain the vehicle registration number for future use on another car. The application must be done before completing the deregistration process. The applicant needs to submit Form TD129 (‘Application for Transfer or Retention of Vehicle Registration Mark’) and Form TD184 (‘Notification of Cancellation of Vehicle Registration’), along with the original vehicle registration document, the original vehicle licence, the original scrapping certificate, and the identification document of the registered owner. The fee for retaining a number plate is HK$560, while deregistration is free of charge.

Will the Transport Department refund my unused vehicle licence fee?

Yes. If your vehicle licence has more than 60 days remaining, you may apply for a refund of the unused licence fee from the Transport Department. No extra form is needed if the refund is related to vehicle deregistration. The refund amount is calculated by multiplying the annual licence fee by 0.24% and then by the number of unused days, provided the remaining period is at least 60 days. The Treasury will send the refund cheque to the registered owner’s address, payable to the registered owner. Processing usually takes about four to six weeks. If the address has changed, the Transport Department must be notified.