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Back to Motoring news

Motoring news

Scrappage scheme ends

31/03/2010

The Scrappage Incentive Scheme has come to an end after 10 months, with the last orders having been accepted on Tuesday.

Launched in May 2009, the scheme was subsequently extended with more funding and for a month longer than originally planned. It provided a £2,000 discount to buyers of new vehicles who committed a qualifying vehicle for scrap.

The Department for Business, Innovation & Skills (BIS), which together with manufacturers had funded the scheme, said that it had helped "up to 400,000 customers to buy a new car". Business Secretary Lord Mandelson added that it had achieved the intended results.

"The figures show that this scheme gave vital support, boosting demand when the industry needed it most," he said.

Figures from the Society of Motor Manufacturers and Traders (SMMT) reveal that just over a fifth (20.4%) of all new registrations were conducted through the scheme during its course. Moreover, a BIS survey, conducted in October 2009, found that 54% of those buying through scrappage had never bought a new car before, and that 56% would not have done so had the scheme not been in place.

But while figures from the SMMT show that cars bought through the scheme emit on average 27% less carbon dioxide (CO2) than the cars that were scrapped, environmental groups have questioned the overall benefit - stressing that CO2 is also produced during the design, production and disposal of vehicles, and arguing that it is better to retain old cars.

Meanwhile, the National Audit Office noted in a report last week that the scheme involved a long-term loss of £18 million. It also revealed that - despite being warned that the scheme did not offer good value for money - Lord Mandelson pushed ahead with its introduction, reasoning that it was particularly important to stimulate sales during a recession.

Commenting on the scheme's close, SMMT chief executive Paul Everitt said that it had "given a much needed stimulus to the UK motor industry, boosting sales and production volumes [and] protecting thousands of jobs in retail and manufacturing".

BIS stressed that the Government is committed to supporting the "vital" automotive industry beyond scrappage. Several manufacturers have eased the end of the scheme with the introduction of so-called "swappage" initiatives, under which they guarantee a minimum trade-in value for old vehicles.