The UK car scrappage scheme

How the new 'vehicle discount scheme' works

You can get £2000 off a new car if you scrap an old car

The car scrappage scheme has now come to an end

At the close of the scheme, Lord Mandelson, Business Secretary 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."

Latest figures and survey results from The Department for Business, Innovation and Skills (BIS) show that scrappage contributed to approximately one fifth (20%) of all new car registrations since the scheme started.

- Half (54%) of scrappage buyers surveyed had never bought a new car before

- More than half (56%) of those surveyed said they would not have bought any vehicle at this time if the scrappage scheme had not been introduced

- Cars bought through scrappage had average CO2 emissions of 133g/km - 27% lower than the average CO2 of scrapped cars

- The average age of cars scrapped under the scheme is just over 13 years - 90% of all cars scrapped in the scheme were between 10 and 16 years old (SMMT)

- Government data estimates that there may have been as many as 4,000 jobs supported by the scheme at manufacturers and suppliers across UK

- Of those surveyed 60% of car owners who bought a new vehicle under the scheme were over 60 years old

(31 March 2010)

Almost all European countries except Poland now have a scrappage scheme in place so the the AA welcomed the budget announcement that a vehicle scrappage scheme was to be introduced in the UK – we first raised the scrappage issue with Downing Street last September.

Scrappage scheme extended to end of March

Government Officials have confirmed that the scrappage scheme will run for an extra month and finish at the end of March.

No new funds have been added into the scheme which has been extended to allow car dealers more time to prepare for the end of the scheme

(5 February 2010)

There are around 10 million 10-year-old cars that may be eligible for the scrapping incentive and if they were all replaced with today's equivalent we would see a 30% increase in fuel efficiency and almost 30% decrease in CO2 emissions.

This incentive from Government and manufacturers will help the economy, environment and employment. Cleaner, greener and safer cars will replace some of the older gross polluters.

Today's vehicles are almost twice as safe as 10-year-old vehicles as they are more likely to have:

The pot of £300 million could benefit 300,000 drivers. In our AA Populus Poll of 17,481 drivers, 28% said that they would consider taking advantage of a Government incentive scheme to scrap older cars if one was available.

How does the scrappage scheme work?

The scheme starts on 18 May 2009 and will run until 28 February 2010, the last date on which orders placed will qualify for the discount, or until the Government funding is all spent.

If you want to take advantage we would recommend acting quickly rather than waiting and risking missing out because there's no more grant money left.

The scheme is being run by the Department for Business, Enterprise and Regulatory Reform (BERR) .

Participation is optional for car dealers but if they join the scheme then the discount must be offered at a brand level i.e. it must be applied to all models on offer.

According to BERR, the manufacturers who had signed up to take part by the start date are: Allied Vehicles, Bentley, BMW, Chevrolet, Citroen, Daihatsu, FIAT, Ford, Honda, Hyundai, Isuzu, Jaguar, Kia, Land Rover, London Taxis International, Mazda, Mercedes Benz, MG Motor, Mitsubishi, Nissan, Perodua, Peugeot, Porsche, Proton, Renault, Rolls Royce, SAAB, SECMA UK, Subaru, Suzuki, Toyota, Vauxhall, Volkswagen, Volvo, Koelliker UK Ltd, Iveco Ltd, Chrysler, Renault Trucks UK Ltd.

Participating dealers will give you a discount of £2,000 off a qualifying new vehicle if you let them scrap a qualifying used car.

There is no limit on how long you must own the new vehicle acquired under the scheme.

The same name must be on the Vehicle registration document, V5C for the old and new vehicle.

Manufacturers will notify government on a regular weekly basis of orders placed under the scheme. The money will be 'ring-fenced' at the time of placing the order but only for four months after which time the claim will have to be re-submitted. If the scheme is successful as predicted this means that in practice the discount is unlikely to be available on car models for which there is a longer than four-month wait for delivery.

Your vehicle

To qualify for the discount scheme the vehicle you trade-in must meet the following requirements:

  • it must be a passenger car or light commercial vehicle not exceeding 3,500kg weight
  • if a van, the vehicle must have been first registered in the UK on or before 28 February 2002
  • if a car, it must have been first registered in the UK on or before 31 August 1999 (On 22 October 2009 the extended scrappage scheme came into force and the qualifying date of first registration changed to, on or before 29 February 2000)
  • it must be registered with the DVLA in your name
  • it must have been registered to you continuously for 12 months before the order date of the new vehicle
  • it must have a UK address on the V5C registration document
  • it must not be an insurance write-off
  • it must not be subject to any finance arrangement
  • it must be roadworthy and on the date of the contract between the purchaser and dealer for the acquisition of title to the vehicle by the purchaser, the old vehicle must have;
    • a current tax disc and a current mot certificate/hackney carriage licence, or
    • a tax disc and an MOT certificate neither of which expired more than 14 days before the contract date

If you are keeping your old vehicle until the new one is delivered you must SORN your vehicle, or buy a new tax disc within 14 days of the tax disc running out or you will be committing an offence. Also, if you have neither an MOT or road tax you cannot legally use or park the vehicle on the public road and you will need to make arrangements with the dealer for the vehicle to be collected.

The new vehicle

The new vehicle you want to buy must be:

  • a passenger car or light commercial vehicle not exceeding 3,500 kg weight
  • first registered in the UK on or after 18 May 2009
  • declared new at first registration in the UK with no former keepers

There has been some confusion regarding the details of the scheme which may be subject to further change up to the go-live date.

For the very latest official information visit the website

Join the discussion in the AA zone


31 March 2010