UK Government Car Scrappage Scheme
Posted on November 22, 2014 | By Admin_CBP
Introduced by the UK government in 2009 to encourage UK citizens to buy a new car (or van, but why not motorcycles???!!!) and scrap their existing car, providing they have owned it for more than 12 months (and proved as much). It ran until March 2010 (after extending it from February) and proved very popular, successfully inflating new car sales. The scheme was introduced following a dip in UK new car sales and increased redundancy within the automotive industry but also to get some of the older, more environmentally unfriendly cars off the UK roads.
The government came under some criticism that the rules did not apply to cars that were kinder on the environment and encouraged perfectly good cars to be destroyed (almost all with a valid MOT). Eligible participants received £1000 (£2000 towards a car exceeding 10 years old, although half of this was met by the manufacturers) towards the cost of a new car, although skeptics suggested that new car prices were artificially inflated. To prevent abuse of the system, one condition was that you had to prove you have owned the car for at least a year. The user car also had to be inspected by the dealer or Authorised Treatment Facility.
The scheme was considered a success compared with similar car scrappage schemes in Spain, France, Germany and the US. In Germany the scheme was abused and many cars intended for the scrap yard were instead illegally sold abroad, mostly to Africa and Eastern Europe. This, in part, was due to the slowdown of the scrap metal market, many scrap yard dealers were sitting on mountains of cars but the price of steel had fallen!
Over 300,000 cars were sold under the scheme, accounting for a fifth of all new car sales.
The downside of the scheme was the (potential) detrimental affect to classic cars. With offers of £2000 against the purchase of a new car, the incentives are there for the number of classic cars to be crushed increasing. There have been many stories across the country of classic cars being crushed or saved from the crusher, in some cases.