Scrappage scheme extended

28th September 2009

The UK's Scrappage Incentive Scheme will be boosted by a further £100 million, the Goverment has said.

It's also been announced that cars eligible for the scheme can now be six months younger than before, with the age qualification changed to include cars registered on or before 29 Feb 2000 (V registration).

The scheme will come to an end in February 2010 or when the funding runs out, which ever is sooner.

Lord Mandelson announced the new details in a speech this afternoon.

“The [motoring] sector has been strongly affected by the recession, but the scrappage scheme has delivered a boost to manufacturers and the supply chain. We have listened to the concerns of manufacturers and are increasing the funding of the scheme to £400m.

Car sales, which were boosted by the scheme's introduction earlier this year remain fragile.

So far 227,750 orders have been placed through the scheme. The increased funding enables the scheme to fund a further 100,000 vehicles, bringing total budget to £400 million and covering up to 400,000 vehicles in total.

The extension continues as a Government and manufacturer partnership, with matched funding providing the £2,000 discount for each scrappage order.

It's believed the decision to extend the plan, in which the government pays half the cost, and relies on industry to provide the remainder, is being supported by all the major car makers.

However with almost two thirds of the money already spent, it had been feared that the scheme would run out of cash much earlier than planned.

Changes are also set to offer a lifeline to van drivers. Alongside the increased funding the Government will extend the benefits to van owners with vehicles over 8 years old rather than the current 10 year requirement.

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