Published on: 1st July 2020
If you’re thinking about purchasing a new car, it was suggested a new scrappage scheme would be introduced in the coming weeks that could provide you with an incentive of up to £6,000. However, the government has now confirmed a scrappage scheme won’t be launched.
According to a report from the Telegraph, the new scheme was set to be announced on the 6th of July, with the aim of encouraging drivers to replace their car with a new one. The industry has been facing challenges as the impact of Covid-19 has meant sales have fallen. The initiative could have helped boost new sales and supported the motor trade recovery from the downturn.
The previous scrappage scheme
The previous scrappage scheme, introduced in 2009 as the economy was in recession due to the 2008 financial crisis, was far less attractive then reports suggest the newer version would be.
Under the previous scheme, drivers could receive a discount of £2,000 on the purchase of any new car. Half of this discount was covered by the manufacturers, with the government making up the remaining £1,000. Some manufacturers supplemented the scrappage scheme with additional benefits and discount too.
According to the terms of the sale, cars that were traded in under the incentive were not permitted to be put back on the road or resold for other purposes, they had to be scrapped.
What was expected from the new scheme?
The initial suggestions of an incentive of up to £6,000 indicated that anew scheme will be far more generous than the previous offer. It was suggested that:
- It was likely only cars over a certain age will qualify for the scrappage incentive. In 2009, cars had to be at least ten years old and registered to the owner for at least 12 months.
- In line with the government’s Road to Zero strategy, which includes banning the sale of petrol and diesel-powered cars by 2035, some focus would be placed on purchasing electrical or hybrid vehicles.
Sadly though, the scheme isn’t to be. If you’re thinking about updating your car, you won’t benefit from a scrappage scheme in the coming months.