Find out what the Government’s new car scrapping scheme involves and how you may be able to benefit.
In the Budget 2009 announcement the Chancellor outlined new measures aimed at boosting the ailing car industry. These include a scheme allowing motorists to scrap cars that are more than 10 years old, and in return get a discount of up to £2,000 on a new car.
By offering this £2,000 incentive it is hoped that more people will give up their old cars and replace them with new models. This is intended to provide a much-needed boost to the new cars market and stem the tide of job losses and company closures in the car industry.
The introduction of more brand new vehicles onto Britain’s roads is also intended to improve road safety, reduce CO2 emissions, and decrease the number of breakdowns on roads.
If you have a car that is more than 10 years old, and wish to purchase a new car, the scrappage scheme could potentially offer you a great deal. With a Government hand-out of £2,000 towards your chosen new vehicle, you could have the chance to buy the new car you wanted but couldn’t quite afford.
Who is eligible for the scheme?
You must fulfil the following criteria in order to secure your £2,000 towards your new car:
- You must provide documents that prove your old car has been registered in your name continuously for a year or more, before the order date of your new car.
- Your car must be at least 10 years old.
- Your car must have a current MOT certificate.
- Your car must weigh no more than 3,500kg.
- The scheme is open to all cars and small vans that were first registered in the UK on or before 31st July, 1999.
How can I benefit?
If you have decided to trade in your old car, you won’t need to formally apply to join the scheme. Simply get in contact with your local car dealership and find out if they are participating.
Your dealership will then be able to confirm whether or not your old car is eligible to be traded in. They will deal with the required paperwork and arrange for your old car to be scrapped.
You will then be able to take your choice from the new models on offer, and the £2,000 discount will appear on your sales invoice. The scheme will apply to all manufacturers’ models, not just selected ones.
There is no limit on the amount of new cars that can be bought by an individual or business under the scheme. Also, if you like you can scrap an old car and apply your £2,000 discount to a new van, or vice versa.
What else should I consider?
The Government are setting aside £300 million for the scheme, and although it is anticipated to run until March 2010, it will terminate if this funding runs out early – so the scheme’s availability is limited.
Also, bear in mind that not all car manufacturers have welcomed the new scheme. Ford and Honda have thus far delayed participation, citing reasons of VAT disputes. Therefore you will have to check which manufacturers are involved in the scheme before deciding on your new car. (As of May 2009, Ford and Honda have now both joined the scheme).
Remember to factor in the costs of your new car when deciding whether or not to participate in the scheme. The running costs and cost of insurance for your new vehicle may be more expensive than your old vehicle, in which case the £2,000 discount may not be worth it.
