THE scrappage scheme details have just hit our in-box from the Govt – here is the press release in full!
It has been issued by Lord Mandelson’s BERR department:
MOTORISTS are being offered £2,000 towards a new car or van if they trade in their 10-year-old, or older, vehicle for scrap under plans unveiled by the Government in today’s Budget.
The decision to implement a scrappage scheme has been taken after careful consideration of car industry proposals, lessons learnt from European schemes as well as concerns raised about the impact of such a scheme on other sectors of the economy.
The UK scheme, with £300m from Government and matched funding from industry, is intended to provide immediate support on a short-term basis to boost the car industry and its supply chain in the wake of falling sales. It will also get older vehicles off the road and encourage consumers to invest in new, safer, and potentially more environmentally friendly models.
Business Secretary Lord Mandelson said: ‘This is targeted action with a capped budget and for a limited time, designed to boost the whole motor trade. This will ensure that the benefits of a scrappage scheme are balanced with the needs of other sectors of the car industry such as the second hand market, maintenance and repair businesses, and other industries that produce consumer durables or on the taxpayer.
‘The car sector is under huge pressure at the moment and the government is determined it remains a very important part of our manufacturing base. It invests heavily in research and development, supports highly skilled workers and a wider supply chain. These are vital to our future manufacturing and retail success.’
The scheme will be run by automotive manufacturers who wish to participate. It is expected to be operational from mid-May to allow industry time to prepare. There will be proper verification procedures to ensure the rules are followed, including audits by DVLA to avoid abuse that has been encountered in other countries.
Business Minister Ian Pearson said: ‘People will not only save hard-earned cash on buying a new car or a van for their business but they will know they are helping save jobs too.
‘If you’ve got a vehicle that’s ten years old or more, you just need to talk to a participating dealer who will do the rest. You will get at least £2,000 towards a new one.’
HOW IT WILL WORK:
1. The £2,000 grant is made up of £1,000 from government with matched funding from industry. The scheme will operate from mid-May until March 2010 or until the government funding has been used.
2. It applies to commercial vans (up to 3.5 tonnes) as well as cars that are 10 years old or older.
3. The scheme is a voluntary scheme so not all manufacturers or dealers may participate.
4. How to apply
5. The dealers will do all the paperwork for motorists participating in the scheme and arrange for the old vehicle to be scrapped. The dealer will check that the vehicle being traded in and the new one being bought qualify under the scheme:-
OLD VEHICLE
Passenger car or small van up to 3.5 tonnes
First registered in United Kingdom on or before 31 July 1999
Currently registered with DVLA to the registered keeper making the application, or currently on Statutory Off Road Notification (SORN)
Current MOT test certificate
Registered Keeper must have a UK address
The registered keeper has been the registered keeper of the vehicle continuously for the preceding 12 calendar months before the order date of the new vehicle
NEW VEHICLE
Passenger car or small van up to 3.5 tonnes
First registered in the UK or after the date the scrappage scheme is launched and declared new at first registration in the UK with no former keepers
UK specification vehicle
Registered to the same registered keeper as the registered keeper of the eligible vehicle to be scrapped
If a manufacturer doesn’t want to cough up the £2k can the customer still get the £1k, which on a 10 year old car is not a bad p/ex value
After the wait this seems a bit of an anti climax
I don’t think they can. I think the money will only be available if the cash is matched my the maker. Which might be the problem.
Hahahah, this is a real confusing message. Customers think they will get £2k from the Government, for buying a new car.
Then, they suddenly realise they have to have owned a 10-year old car for a year (which of these customers buy new cars, or are even in the market? 10-year-old-car owners are inevitably tending towards sub-prime. If they want a new car, who will finance it?).
Then, they realise the the manufacturer has to opt-in to the scheme. Errr, that’s Hyundai and Kia so far? Yay! Everone else is hammering calculators and seeing how much dealers will need to “share” the promotion costs.
Then… which manufacturer can give away a further £1k per car? So, sticker prices increase or discounts reduce to claw back the £1k… (or is that why so many price-rises already this year) and that is inevitably passed on to everyone NOT scrapping a car when they buy a new car (the vast majority of buyers subsidise this scheme and get penalised)….
…unless there is a two-tier new-car price system for scrappage or non-scrappage deals, and that will lead to claims of profiteering!
In total, the promoters of this scheme have created a real messy dog’s breakfast. Congratulations, car industry!!!
In addition, the detail still has be decided, so the BIG FREEZE with confused, expectant consumers waiting before they jump, continues. On and on. Oh, what fun everyone is having with such a mess.
Manufacturers must be solely disappointed they have been forced to go 50:50, I bet!! Shot in the foot!
(Luckily, my own customers, ABC 12 top-10% credit rated individuals, do not usually own 10-year old cars, thank goodness!) How this will affect used car dealers with 7-12 year old stock is anyone’s guess. Be worried.
The weak heads of the SMMT and RMIF should both resign for presiding over this fiasco. Another “announcement success” for Darling, looks good on the surface (he actually claimed he was giving £2k per car in his speech; disingenuous), but more confusion and reason to delay for the punter! Ridiculous.
(Apart from the fact that no one has suggested who actually pays the scrapping cost – the dealer? And the environmental costs described in the article comments, above.)
Ling Valentine