The Government today announced a £100M increase to the vehicle scrappage scheme to build on the success of the scheme in boosting consumer demand.

The automotive sector supports R&D, technological innovation and skills and a manufacturing supply chain that are a mainstay of the wider manufacturing sector in the UK. Industry figures have reflected the positive impacts of the scheme both within and beyond the automotive sector, with manufacturing benefitting and the whole supply chain, from plastics and steel, to individual component manufacturers receiving a boost.

So far 227,750 orders have been placed through the scheme. The increased funding enables the scheme to fund a further 100,000 vehicles, bringing total budget to £400 million and covering up to 400,000 vehicles in total. The extension continues as a Government and manufacturer partnership, with matched funding providing the £2,000 discount for each scrappage order.

Alongside the increased funding the Government will work with manufacturers to extend the benefits to van owners with vehicles over 8 years old rather than the current 10 year requirement. Car owners will also get a boost, with the age qualification changed by 6 months to extend the benefits to cars registered on or before 29 Feb 2000 (V registration). The scheme will come to an end in February 2010 or when the funding runs out, which ever is sooner.

Business Secretary Lord Mandelson said: “The sector has been strongly affected by the recession, but the scrappage scheme has delivered a boost to manufacturers and the supply chain. We have listened to the concerns of manufacturers and are increasing the funding of the scheme to £400m.

“But we must make sure that the help we do offer is targeted, limited and proportionate. This is not a blank cheque to the auto manufacturers but recognition that there is still a short term challenge to boost demand and confidence in the sector.”

Because of additional funding by the Government and manufacturers, the Scheme will now cover up to 400,000 transactions. It will still come to an end on 28th February 2010 or when the funding runs out, whichever is the sooner

To ensure all 10 year old cars will qualify for the scheme, the date by which vehicles must have been registered in the UK to qualify for the scheme will be changed to 28 February 2000 (V registration) except in the case of vans where the date will be changed to 28 February 2002 (Y registration or earlier, or new style number plates where the 3rd and 4th digits of the registration number are 51)

The £2,000 grant is made up of £1,000 from government with matched funding from vehicle manufacturers.  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 not exceeding 3.5 tonnes
  • Registered in United Kingdom on or before 31 August 1999 [NB – expected to change shortly in line with today’s announcement]
  • Currently registered with DVLA or DVA to the registered keeper making the application
  • Vehicle has been registered to the customer continuously for 12 calendar months before the order date of the new vehicle
  • Vehicle has a UK address on the registration certificate (V5C)
  • Vehicle has a current MOT test certificate before the date of order for the new vehicle, or one that has expired no more than 14 days before the order for a new vehicle was placed
  • Vehicle is taxed, or has a tax disc that has expired within 14 days of the order and insured

NEW VEHICLE

  • Passenger car or small van up to 3.5 tonnes
  • First registered in the UK on 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 (can include left-hand drive vehicles that meet UK specifications)
  • Registered to the same registered keeper as the registered keeper of the eligible vehicle to be scrapped