The Chancellor Alistair Darling has announced in his budget speech that the the UK will introduce a “car scrappage scheme”. The scheme, which will start in May and run until March 2010, will offer a £2,000 incentive to drivers of vehicles over 10 years old to get them into newer, more efficient, less poluting vehicles. It is hoped that this will be a massive boost to the new car market which was down over 30% in March’s plate change.
The government will provide £300 million of funding and the scheme’s incentive will be split 50/50 with the car industry. As a result, car manufacturers must sign up to be part of the scheme and are not obliged to take part. Dealers of participating manufacturers will be required to do all the paperwork for the car buyer, and arrange for the old vehicle to be scrapped.
The old vehicle being scrapped must be a passenger car or small van up to 3.5 tonnes, registered in the UK on or before 31 July 1999, currently registered with the DVLA to a UK-domiciled registered keeper making the application or on a SORN notice, have a current MOT test certificate, and have been continuously registered to the owner for the 12 months precedeing the purchase.
The new vehicle must be a passenger car or small van up to 3.5 tons, first registered in the UK on or after the date the scrappage scheme is launched and be the first registration for the car, be a UK specification car and registered to the same registered keeper as the vehicle being scrapped.
There will be no C02 restrictions on the new cars in order to help sales of cars from luxury manufacturers – particularly Jaguar Land Rover – and the scheme is scheduled to close in March 2010.