The Solicitor - The FindLaw UK Life, Family and Workplace Law Blog

5 Things You Need To Know About The Scrappage Scheme

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1. What's all the fuss about this 'scrappage scheme'?

The vehicle discount scheme, also known as the 'scrappage scheme,' began in May 2009.  The primary objective of the programme is to provide immediate support to boost the car industry and its supply chain during the downturn and stimulate demand.   A corollary objective is to get older vehicles off the road and encourage consumers to invest in new, safer, and more environmentally friendly models.

2. Okay.  So far, so good - it's good for the economy and the environment - but what do I get out of it?

Well, subject to certain terms and conditions (see below), the scheme offers a £2,000 discount when you trade in your existing vehicle and buy a new one.  The subsidy comprises £1,000 from the Government with matched funding from vehicle manufacturers.  The discount is deducted from the price you pay for the new vehicle and will be shown on your invoice when you take delivery of it.

Note, as an added incentive to buy a new car, many manufacturers participating in the scheme are actually offering more than the required £1,000 matching contribution.

3. The downturn won't last forever (hopefully), so when does the scheme end?

It will last until March 2010 or once 300,000 customers have benefited from it (whichever is earliest).  Figures released on Monday showed that 154,927 people have already bought  under the programme.  

If the scheme maintains its current trajectory, it will end mid-autumn, well before March 2010 - so act fast!

4. Which vehicles can be traded in & bought under the scheme?

Current vehicle

As regards your current vehicle, the scheme is limited to: (1) a car or small van with a maximum weight of 3,500 kg; (2) registered in the UK on or before 31 August 1999; (3) currently registered with the or in your name; (4) registered to you continuously for 12 months before you order the new vehicle; (5) with a UK address on its registration (V5C); (6) a current test certificate before you order the new vehicle (or within 14 days of expiry at the time of order); (7) a current tax disc when you order the new vehicle (or within 14 days of expiry at the time of order); and (8) insured when the order for the new vehicle is placed.

New vehicle

As for the car you intend to buy, it must be: (1) a car or small van with a maximum weight of 3,500 kg; (2) first registered in the UK on or after mid-May 2009; (3) declared new at first registration in the UK with no former owners; (4) designated a UK specification vehicle; and (5) registered to the same registered owner as the registered owner of the vehicle to be scrapped (i.e., you).

5. Alright, I'm sold!  What do I need to do to take advantage of the scheme?

Contact your local dealer and ask them whether they have signed up to the scheme.  They will do all the paperwork and arrange for the old vehicle to be scrapped.  They will also check that your current vehicle and the vehicle you intend to buy both meet the rules of the scheme.

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