Car scrapping incentive announced
Vehicles over ten years old which owners have driven for more than twelve months will be worth £2,000 when traded in for a new car as part of the Government’s new scrappage scheme. It is estimated that 300,000 drivers could benefit from the scheme, announced in the Budget.
The Government has allocated £300m to be matched by the manufacturer to encourage new car purchases and kick start demand. The state will provide £1,000 and the car maker will be expected to produce the other half.
According to the AA the average cost of a typical car loan is £8,000, meaning that a trade in on the scrappage scheme could reduce the funding needed for a new vehicle by a quarter.
The AA estimates that if all UK vehicles on the road eligible for the scrappage scheme were to be replaced with new cars it would result in a decrease of almost 30pc of carbon emissions and a 30pc increase in fuel efficiency.
The scrappage scheme will be implemented in May and run until March next year, or until the funding is exhausted.
Source: Extracts taken from The Telegraph 22nd April 2009
