This study investigates the influence of cobalt (Co) addition on the microstructural and wear properties of an aluminum (Al) scrap alloy containing high iron (Fe) impurity content (3%). Microstructural analysis using scanning electron microscopy and optical microscopy confirmed the presence of Co in Fe-rich intermetallics. Upon increasing the Co concentration, β-Al5FeSi phase was seen to be refined without significant morphological modifications. Furthermore, Co addition promoted the formation of a new quaternary phase Al32Si7Fe4Co phase, which was finely distributed throughout the microstructure and acts as a tribo-layer in the Al scrap alloy, offering enhanced wear resistance and improved stability against wear. Standard EN-31 steel disk with compositions chromium (Cr)-1.6%, manganese (Mn)-0.75%, silicon (Si)-0.35%, and carbon (C)-0.9% was used for the wear test. Microhardness and wear properties were evaluated for both the as-cast and heat-treated alloys, with the as-cast samples exhibiting superior wear resistance and a lower coefficient of friction compared to the T6 heat-treated samples. Addition of Co showed refinement in the β-Fe rich intermetallics over the morphological modifications. Similarly, Co addition enhanced the hardness and wear resistance in the as cast alloys. This work provides a detailed analysis contributing significant understandings into the wear mechanisms and potential applications of Co modified recycled Al in various industrial sectors.