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March 31, 2010    

UK car scrappage scheme ends today

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by Kay Murchie
”UK

The UK’s car scrappage scheme, which was introduced last May to boost the ailing car industry, expires today after giving the car industry a much-needed boost.

The £400 million initiative paid drivers of cars at least 10 years old £2,000 off the price of a new vehicle. The £2,000 grant was made up of £1,000 from the Government and £1,000 from the carmaker.

The scheme proved extremely popular and has resulted in a rise in car production and sales.

According to figures from the Business Department, the scheme contributed to around 20% of all new car registrations since its inception.

More than half of buyers (56%) that participated in the scheme said they would not have bought any vehicle at the time if scrappage had not been introduced.

Business Secretary Lord Peter Mandelson said: “The scheme was always time limited and today as it closes I am pleased to see scrappage has delivered the results we aimed for - not just for manufacturers, but for the whole industry and its supply chain.

“The figures show that this scheme gave vital support, boosting demand when the industry needed it most, helping to position the auto sector to meet the challenges of building a strong low-carbon future.

“I fully endorse the initiatives already taken by industry to offer new deals and additional savings to customers still interested in buying a new car,” added Lord Mandelson.

Meanwhile, the Society of Motor Manufacturers and Traders, said: ‘The scheme provided a vital stimulus to the automotive sector during a difficult economic period. While the 2010 market is expected to dip, the recent increase in fleet and business demand is expected to soften the impact of the end of the scrappage scheme.”

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