Scrappage Scheme

THOUSANDS of you signed our petition to support the Auto Express campaign to introduce a British scrappage incentive scheme – and we’re delighted to announce the Government’s finally given it the green light!
 
Set to be launched next month, the scheme will allow owners of cars aged ten years or more a grant of £2,000 if they swap it for a brand new motor. The car they buy must have been registered in the UK on or after the date the scheme starts – set to be next month.
 
It’s great news for motorists – but the announcement has a sting in its tail for carmakers. The Department for Business Enterprise and Regulatory Reform (BERR) has now revealed the Government will only be offering a £1,000 incentive when the scheme starts in May, and that figure will have to be matched by participating carmakers.
 
Motorists will also be expected to have owned their ten-year-old vehicles for at least one year, before they can take part. Their banger must be registered with the DVLA and have a current MoT, while the registered keeper must have a UK address.

While many industry bosses have welcomed the scheme, car companies have criticised the government for effectively forcing them to subsidise the incentive. Here's the reaction so far...

Paul Philpott, managing director of Kia: “We welcome the Government’s positive response to the difficult times facing the new car market but I am personally disappointed that our Chancellor is only going half-way compared to other European governments.

“I am pleased for consumers and for our dealers that the Chancellor has taken positive action and that he is introducing this scheme rapidly. The devil will be in the detail and I am sure the Society of Motor Manufacturers and Traders (SMMT) will be looking for early meetings with the Treasury to discuss this.

“The reality is that the Government is shifting a large part of the cost of this programme onto the shoulders of the manufacturers, when it is the manufacturers who are working hard night and day to deal with the effects of the economic turmoil and recession around the world."

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Paul Everitt, SMMT chief executive: “This is good news for consumers and will get people back into showrooms, kick-starting demand in the market. The scheme recognises the economic value of the motor industry and we are determined to make it a success. There is clearly a great deal to do and we look forward to discussing the finer detail of the proposal with government in the coming days.”

RAC Foundation director, Professor Stephen Glaister: "If the scheme leads to a reduction in the average age of the national car fleet then this has to be good for road safety as more modern cars will have a wider range of safety features built in."

Paul Williams, chairman of the Retail Motor Industry Federation (RMIF): “The introduction of a vehicle scrappage scheme as announced in the Budget will boost the new car market, encourage consumers to get back into car showrooms, and reduce the likelihood of employee downsizing in this sector.”

Edmund King, president of the AA: "Any incentive will be delivering a short-term boost for the industry. It will bring confidence back into the market."

British Vehicle Rental Leasing Association chief executive John Lewis: "Unfortunately, our ministers have chosen to follow the German model, which has been widely criticised for decimating the country's used car industry." 

The Campaign for Better Transport: "Green groups are sceptical. For example, the German scheme merely requires the cars sold to meet existing European air quality laws (which all must do anyway), and any scrappage scheme may not save UK jobs since most cars bought here are made in other countries.

"A scrappage scheme without strict criteria about the age of cars to be replaced could well lead to people bringing forward decisions to replace their cars with current carbon-emitting models now, rather than waiting for electric cars to come on the market."

Andrew Davis, director of the Environmental Transport Association: "Altering the way you drive and keeping a car longer can be a greener option than buying new. Even if the new model you buy is more economical, once you take into account the energy needed to scrap the old car and build an entirely new one the overall benefits are likely to be tiny."