Bangers for Cash Drivers' Car Scheme Extended

Mandelson Pledges More Money for Car Scrappage Scheme

Sep 28, 2009 Kathleen Duffy

Car buyers will be pleased to hear that Lord Mandelson, the Business Secretary, has announced that the UK's scrappage scheme or Bangers for Cash, is to be extended.

At the Labour Party Conference on 28th September 2009, as well as pledging government support for the motor industry, Lord Peter Mandelson, the Industry Secretary, pledged to inject more money into the car scrappage scheme.

Car Scrappage Scheme to be Extended

The scheme, similar to those in the USA and Germany, began in May 2009 and was designed to allow consumers £2000 off the price of a new car if they traded an old car in. The car had to be at least 10 years of age. The £300m scheme was due to end in February or when the limit of 300,000 vehicles that could be scrapped was reached.

However, the scheme was now running out of money and the car industry had called for an extension. In response, the scheme will be extended to include 100,000 more cars and vans.

The number of orders placed through the car scrappage scheme is at present 227,750. The cost to the government is £1,000 per car, meaning therefore that £227m has so far been spent. With the promised extension, a total of £400m will have been given to the scheme.

Qualifications to Car Scrappage Scheme

The car scrappage scheme will still end in February but there are other qualifications:
The age qualification will be changed by six months to any car which is registered before 29th February 2000 (V Registration)..
The minimum age of vans being scrapped will be cut from ten years to eight years. Eligible vans must have been registered on or before 28th February 2002 (Y Registration)
Your current vehicle must be a car or small van weighing up to 3,500kg
Ensure that the vehicle has been registered in your name with the Driver and Vehicle Licensing Agency for at least 12 continuous months. The address on the registration certificate must be in the UK.
In addition, the vehicle must have a current MOT Certificate in place.
You must buy from one of the manufactors taking part in the scheme.

The news of the car scrappage scheme extension was greeted with positive comments by Paul Everitt of the Society of Motor Manufacturers. Everitt commented that it was an important decision which should inspire much needed confidence in the potential consumer and businesses alike.

He pointed out that the additional 100,000 vehicles would counter the negative impacts of a return to higher rate of VAT, as well as the introduction of first year VED rates.

Nissan's UK managing director, Paul Willcox, acknowledged that this initiative would give a much-needed boost to the car industry.

In similar vein, General Secretary of the trades union Unite, Derek Simpson, commented that this kind of initiative would help the Labour Party to reconnect with the British people, one of the major criticisms aimed at the Labour Party in recent weeks.

Bangers for Cash Gives Consumer Incentive

Manufacturing organisations are also hoping that this new initiative will continue to boost the flagging car industry. Mandelson’s extension of the car scrappage scheme is seen as a positive response to a letter sent to him by such organisations, including the EEF, Manufacturing Technologies Association and the British Plastics Federation.

They pointed out that ending the scheme would see a lack of any incentives for the British public to buy, and a decline in demand would be disastrous for the car industry in the present economic climate.

Hopefully this welcome extension of the car scrappage scheme, or Bangers for Cash, will inject not only money, but consumer confidence into Britain's motor industry.