The government UK Car Scrappage Scheme started in May 2009 and ended in March 2010. Is there an argument to bring it back in 2015?
The UK Car Scrappage Scheme allowed owners of ‘old bangers’ (cars registered prior to 29th February 2000) to part-exchange their cars and receive £2000 against the price of a new one. The government chipped in £1000 with the car manufacturer adding another £1000.
It worked well as older polluting cars were scrapped, car maufacturers and dealers stayed in business during the downturn in the economy because demand for new cars soared.
Even the environmentalists were happy as, on average, cars which went to the scrap yard had 182.1g of CO2 per km whereas their replacements 132.4 g/km.The deal was actually good for the taxpayer too as any cars selling for over £7,600 resulted in the VAT collected exceeding the cost of the £1000 government subsidy.
However, despite all the good it did at the time, it is unlikely the government will repeat the exercise. The economy seems to be on the mend, car manufacturers and dealers are posting pre-2008 new car sales figures and the public are enjoying the lowest interest rates ever.