Budget: car scrappage scheme gets go-aheadDrivers will get up to £2,000 towards new cars

23 April 2009

Budget 2009: scrappage scheme

A scrappage incentive scheme for cars will be introduced in May

A new scrappage incentive scheme for cars will be introduced next month, giving thousands of motorists the chance to save cash on new cars


The move, which aims to boost new car sales and take older, less efficient cars off the road, will see drivers offered £2,000 towards a new car when they voluntarily scrap their current model – provided it was registered before 31 July 1999. Drivers need to have owned their car for at least a year in order to qualify for the £2,000 cash incentive.

Scrappage scheme

The announcement has been welcomed by the UK’s battered automotive industry, which has suffered months of poor car sales at the hands of the recession.

Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders said: '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.'

An SMMT spokesman also told us that although car buyers qualifying for the would be guaranteed the £2,000 discount, 'there are always opportunities to secure greater discounts. It's a very competitive market - the price shown in the windscreen of a car is not necessarily the price you'll pay.'

Outlining the plans as part of this year’s Budget speech, Chancellor Alistair Darling said the scheme would be time-limited, running until March 2010.

A total of £1,000 will come from the government and the remaining £1,000 from car companies, with participants being able to buy any new vehicle, including small vans, rather than just low-pollution models. About £300 million has been put aside by the government to fund the scheme, which is expected to come into effect as early as mid-May and will last until the grant runs out – enabling 300,000 consumers to benefit.

If consumers take up the incentive in the numbers predicted, the government also stands to benefit from increased VAT receipts on all the new cars sold - indeed, it should recoup more than the £300m it is investing in the scheme.

Fuel duty

Mr Darling also announced plans to increase fuel duty by 2p a litre in September, and further rises of 1p a litre are expected each April for the next four years. To find out how you can save cash on petrol, diesel and LPG, read the Which? guide to finding the cheapest fuel.


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