The Chancellor of the Exchequer, Alistair Darling, announced in the Budget speech that a UK car scrappage scheme will be introduced from next month (May).
A discount of £2000 will be available to drivers of cars that are over 10 years old when they buy a new vehicle. This discount is to be available until March 2010 or sooner if the set aside budget of £300 million has been exhausted.
Half of the £2000 discount will be funded by the budget provided by the government and the other half provided by car manufacturers. Vehicles will need to have first been registered before 31st July 1999 to be eligible.
The scrapped vehicle must have a current valid MOT certificate and have been continuously registered to the applicant for at least 12 months prior to the application who must be a UK resident.
The new car needs to have been registered to the same registered keeper as the old car after the UK car scrappage scheme has been set up and it must be a UK specification vehicle.
The scheme is designed to provide a boost to the ailing motor industry and will be run by motor manufacturers who wish to participate. The DVLA will be responsible for conducting audits to avoid abuse of the scheme.
Similar schemes have already been launched in Germany, where it increased new car sales dramatically, France, Italy and more recently Spain.
While the scheme is intended to boost the motor industry the beneficial environmental impact could be very significant. New cars are generally more environmentally friendly than older ones. An average 10 year old car will emit around 15% more CO2 than a new model. Therefore if 100,000 old cars are replaced with new ones, each covering around 10,000 miles a year, around 240,000 tonnes of CO2 will have been saved from entering the atmosphere.
Exact details of how the car scrappage scheme will benefit new car leasing customers have yet to be finalised. Please check the Nationwide Vehicle Contracts car scrappage information page for up to date details.
