U.K. officially launches £2K scrappage scheme
As expected, UK Finance Minister Alistair Darling has officially announced a new vehicle scrappage scheme that will pay motorists £2,000 ($2,914 USD) for trading in a vehicle that's at least 10 years old for a new car. Half of the funds will be provided by the government, and the other half will be paid out by the automakers.
There will be no regulations governing the required fuel efficiency or type of vehicle will qualify for the subsidy, leading some to question the environmental benefits of the scheme. There are also questions as to where the £300 million ($435M USD) required to fund the program through March of 2010 will come from, as Darling has also announced that the UK budget would hit its largest deficit ever.
In addition to approving the car scrappage scheme, the government also officially approved an increase in the national fuel duty by 2p per liter.
[Source: Reuters]
Reader Comments (Page 1 of 1)
mike 2:40AM (4/23/2009)
Typical UK government fudge on what should have been a very straightforward scheme.
The government expects the manufacturers to contribute £1000 to the scheme but they have already been cutting prices to the bone. The £1000 extra will take them into loss making situations particularly on the small, lower Co2 cars - which have been selling well anyway.
So prices will more than likely have to rise on these type of cars before the scheme starts as the deal is that manufacturers can't pick and choose which models to offer - and of course those price rises will then impact on sales to customers that don't have a car to scrap!
Not very clever.
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Dave healey 11:34AM (5/11/2009)
The scrappage scheme has been ill thought out and is open to fraud. It is going to have a serious effect upon the UK car insurance industry and will cost the UK public millions in additional premiums. The scheme is neither green nor deflationary - read the whole truth about the effects of this scheme at at http://www.car-insurance.tv/carinsuranceblog/2009/05/government-car-scrappage-scheme-has.html
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