'Time running out' on car scrappage scheme as VAT hike looms
Wednesday, 14 October 2009 12:02
Time is running out for car buyers looking to take advantage of the £2,000 discounts from the car scrappage scheme.
A further pressure is coming as the start of 2010 will see VAT rise back up to 17.5 per cent.
The budget for the 'cash for bangers' scheme is enough to cover 400,000, following a recent extension.
So far 246,855 vehicle orders have been made using the scheme.
At the current rate of over 11,000 vehicles have been scrapped a week, the scheme will run out of funding at the end of the year.
Mark Bower Dyke, chairman of Be Wiser Insurance, said: "Those who wish to take advantage of the scrappage scheme need to know their time is running out.
"Motorists driving a car eligible for the scheme have been safe in the knowledge that their car is worth at least £2,000 - as soon as the scrappage scheme ends this will no longer be the case."
A further factor to harry drivers into using the scheme is the planned increase in VAT after the 13-month reduction to 17.5 per cent from 15 per cent.
"Not only will car buyers miss out on the savings offered by the scrappage scheme, but they are facing a 2.5 per cent increase in VAT at the end of December," Mr Bower Dyke said.
"On top of everything else this is just salt in the wound."
The car scrappage scheme provides a £2,000 discount on buying a new car if a vehicle over ten years old - and registered with the owner for over a year - is scrapped.
September saw a 11.4 per cent increase in registrations due to private buyers taking advantage of the scheme and the new '59' number plates.
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