Scrappage Scheme extended

[Kev]

The UK’s scrappage incentive scheme has been extended for a further 100,000 cars.

Business Secretary Lord Mandelson announced the move, which has been called for by the car industry, in his Labour Party conference speech. It will mean an extra £100m from the government towards the scheme.

"Today, I am extending our popular car scrappage scheme with extra money for an additional 100,000 cars and vans," Mandelson told the annual conference

The move followed a formal application for an extension from the car makers' trade body, the SMMT.

The £300m of government money alloted to keep the scheme afloat until next March is set to run out this October - five months early. An extension of the scheme would cost an estimated £250m extra of government money, although additional VAT payments would offset this.

The car industry has been lobbying hard for the scheme's extension because it is concerned that next January's VAT rise will otherwise knock sales.

Under the UK car scrappage scheme a £2000 incentive is paid to motorists who scrap cars registered before 31 August 1999 to buy a new car. The government contributes £1000 and the remaining amount comes from the dealers and manufacturers.

In August, UK new car sales were up six per cent on 2008 levels but 2009 sales to date are 21.5 per cent down on last year.

[trix]

according to the department of business, innovation & skills (ie the monkies who are running it ) the current state of play with regard to orders placed is..

227,750 orders for new vehicles have been taken since the scrappage scheme was announced in the Budget. This figure covers the period from 23 April up to 20 September

(think they were being very optimistic that it was going to run out in october )

S

[Recce]

I'm confused by the maths of this.
The Gov. pays out £1000 for vehicle being scrapped. The scheme is being extended by 100,000 vehicles, or £100m. So where is the other £150m going? The dealers pay out the other £1000 to the punter, and swallows the cost for the actual scrapping of the vehicles.

Is the Gov. so inefficient that it costs £1500 in admin for each vehicle being scrapped?

But will this effect the 'Roc? Will dealers still offer the scrappage scheme for the 'Roc with the lead times being so long at the moment

[trix]

if i understand what you are asking correctly..
the extra £150million is being spent on the admin and other costs associated with setting up the extension. they are recouping this money from the extra vat money that the orders will obtain (i woudl guess)
dealers just want to sell cars & already they are coming up with interesting ways of getting round the timeframe issue so that is not for the purchaser to worry about really

S

[trix]

FYI

they have also moved the date for cars forward by 6 months to cars registered on or before the 29th February 2000 and vans can now be scrapped over 8 years old.

I particularly like this bit?!

Will my old vehicle qualify if it is off the road?
Any vehicle must be legal to qualify. So if it is legally off the road with a valid Statutory Off Road Notification (SORN) document then it will qualify.
In that case it does not need to have an MOT certificate or insurance. A vehicle that is taxed must be insured and have a valid MOT. Other vehicles will not be eligible

S