SCRAP: Q&A on scrappage plan

Time 6:50 am, March 25, 2009

scrap1CONFUSED by the scrappage scheme? Let Car Dealer explain exactly how it would work in our Q&A.

What is it? A cash incentive scheme. Buyers of new cars would get a cash rebate against the purchase of a new model, if they scrapped their old one.

Who’s doing it? Austria, France, Germany, Greece, Italy, Portugal, Romania and Spain. In general, up to 2500 Euros are offered against the purchase of a ‘green’ new car, if one older than 10 years is scrapped.

Has it been successful? New car sales in Germany rose by 21 percent last month. Similar successes have been seen in other European countries, too. Here, the SMMT says it could add 250,000 sales in an 18-month period.

What’s this green element? Cars will have to emit below a certain target CO2 emissions figure. Car Dealer Magazine reckons it would probably be 140g/km, though the Government could be bold and say it would be 120g/km.

Which cars would it incentivise? Smaller, more economical cars, such as Ford Fiestas and Renault Clios. Such is the demand for superminis, Renault’s actually just had to boost Clio production by 10 percent. Ford’s Fiesta factory is working flat-out, too. 88 percent of people surveyed said they’d use it to buy a car costing up to £10k.

Is it popular with customers? A recent SMMT survey showed that 61 percent of people would like to take up the offer. More generally, two-thirds of respondents agreed with the idea of taking old cars off the road and incentivising their replacement with green new ones.

How would it work? Customers would take their car to an official vehicle dismantler, and get a scrappage certificate to confirm the vehicle has been ecologically taken off the road.

Would it just be new cars? No. The scheme would extend to nearly-new cars too, probably up to a year or 18 months old, which also came in under a key CO2 figure.  The scheme would also include LCVs.

How much would it cost me? It would cost you nothing. The Government would finance the rebate, and handle this separately from any transactions you made. This means you could still incentivise sales to customers, thus offering them independent savings, too. The Government would recoup the money of the scheme in increased VAT returns.


Read more about our Scrap Scheme Now Campaign here

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.

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