Hopes for new car sales incentives dashed as government says ‘no plans’ for a scrappage scheme

Time 11:10 am, June 29, 2020

The government has ruled out offering a scrappage scheme to boost new car sales in the UK.

Speculation was rife that the government would introduce incentives for consumers to make the switch from older, more polluting cars to newer and cleaner ones.

Various schemes have been rumoured including a cut in VAT, a scrappage scheme for diesel-only cars or a wider scrappage scheme to get drivers into electric vehicles – as first reported by Car Dealer Magazine in mid-April.

Now it seems the government has ruled out any kind of scrappage scheme saying there are ‘no current plans’, according to Auto Express.

A government spokesman said: ‘We have no current plans to change the existing incentives or to introduce a scrappage scheme. We are committed to building a greener transport system and reducing carbon emissions to reach our goal of net zero by 2050.’

It was believed the prime minister was considering a £6,000 EV scrappage scheme and later rumoured it was to be announced on July 6.

But now the rumours have been quashed in their entirety, and will leave dealers wondering what level of support – if any – they can expect to boost new car sales.

With new car sales down 89 per cent in May, there were hopes some kind of incentive – be it a scrappage scheme or a cut in VAT – could turn that dramatic decline around.

The news will undoubtedly be a blow to dealers who will be left to work out how to incentivise new car sales before the important plate-change month of September.

Speaking earlier this month on Sky News, Marshall CEO, Daksh Gupta, said: ‘We would welcome any stimulus for the sector, whether that be a scrappage scheme, grants or some form of VAT discounting. Stimulus is needed for the sector.’

Manufacturer bosses had been calling for a scrappage scheme to get drivers into electric cars, and it to be of a similar type to the one introduced in 2009/10.

Bosses included Alison Jones from PSA and Jaguar Land Rover’s Rawdon Glover.

The 2009/10 scrappage scheme totalled £400m and gave buyers £2,000 off a new car if they scrapped a model aged 10 years or older with the government’s £1,000 matched by manufacturers.

The scheme lasted 10 months and enabled 390,000 new cars to be purchased.

A report published earlier month by What Car? suggested nearly a third of car buyers were delaying buying in the hope a scheme would be introduced.

James Batchelor's avatar

James – or Batch as he’s known – started at Car Dealer in 2010, first as the work experience boy, eventually becoming editor in 2013. He worked for Auto Express as editor-at-large and was the face of Carbuyer’s YouTube reviews. In 2020, he went freelance and now writes for a number of national titles and contributes regularly to Car Dealer. In October 2021 he became Car Dealer's associate editor.

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