22 Apr 09
Chancellor Alistair Darling
Motorists who trade in cars aged ten years or older could get £2,000 towards their new car under a new scrappage scheme announced by Chancellor Alistair Darling today.
Under the scheme the Government will stump up half the money and participating car companies will foot the rest of the bill.
The Chancellor has set aside £300 million for the initiative which will operate from mid-May until March 2010 or until the government funding has run out.
It's voluntary so some manufacturers, particularly those working to very tight profit margins, may choose not to participate.
Dealers will do paperwork
Currently the margins on smaller cars are tight and any extra cost - including the £1,000 scrappage payment - will inevitably cut into profits and could convert into losses.
The UK car industry had put considerable pressure on the Government to introduce a scheme to encourage new car purchases and help support UK dealers and manufacturers.
The Society of Motor Manufacturers and Traders is hoping the scrappage scheme will result in a 10% increase in new car sales over the next 12 months.
SMMT chief executive Paul Everitt said: 'This is good news for consumers and will get people back into showrooms, kick-starting demand in the market.'
Those who want to trade their car in should have the red-tape done for them. Dealers will do all the paperwork and arrange for the old vehicle to be scrapped. The dealer will check that the vehicle being traded in and the new one being bought qualify under the scheme.
