The recently launched new car and van scrappage scheme could itself be scrapped by August – six months earlier than scheduled because the money will run out.
So many vehicle owners are said to be taking advantage of the £2,000 discount on new vehicles – funded equally between vehicle manufacturers and the Government, which has put up £300 million – that funds will run out long before the scheduled end of the scheme on February 28 next year.
Figures show that 35,000 new vehicles were bought under the plan in two weeks. At that rate, it is calculated, that the Government funding for the initiative will run out by August 20.
The Daily Mail says that if the cash-for-scrap money does run out in August it will prove to be a further blow for the car industry.
September is a key new vehicle sales month due to the registration plate change. As a result, without the extra incentive of the scrappage scheme, sales could fall again.
Sue Robinson, of the Retail Motor Industry Federation, said that the high take-up of the scheme so far may simply be an ‘initial rush’ with sales likely to level out.
The Department for Business, Enterprise and Regulatory Reform, which is funding the programme, says there are no plans to extend the scheme when the budget runs out.