(PRWeb UK) July 3, 2009
Let's take a look at what the Government is proposing and how it will affect car buyers and also car insurance companies like Saga.
Who qualifies for the scheme? Anyone who owns a car or van, less than 3.5 tons, that was registered before July 31st 1997. The new scheme allows you to trade it in for a cash incentive of £2,000 on a new vehicle.
The Government is hoping that the scheme will work on two levels - firstly, to revive a much ailing UK motor industry and secondly, to help take older, less environmentally friendly cars off our roads. This will also affect your car insurance premium, so talk to your insurance provider for specific details.
How the scheme is funded
Approximately half the cash incentive for each sale will come from the Government, whilst the car manufacturers themselves will pay out the remaining £1,000. The car manufacturers will have to sign up to the scheme to take advantage of the offer, whilst dealers will take care of all the paperwork, as well as arranging for the old car to be scrapped.
All scrappage cars must have a valid MOT and be registered with the DVLA. Also, the owner must have a UK address and been the registered keeper for at least a year. The new car must be sold only to the person who is offering the scrappage car and be a brand new UK specification vehicle.
But it would appear that 'Bangers for Cash' is already proving to be controversial. One reason being the fact that you can trade your old car in for any new car or van, not just low pollution models, and the second is that the scrappage allowance will be available on all new cars - not just those built in the UK.
Yet the Government remains confident about the scheme, having set aside £300m to fund it. Lasting until next March, the Government is expecting up to 300,000 car insurance customers to take advantage the £2,000 cash-back incentive.
AA president, Edmund King also thinks the move is a good idea:
"Drivers will delighted by this generous scheme - cleaner, greener and safer cars will replace some of the old gross polluters."
Will the scheme work?
Whether 'Bangers for Cash' will prove as successful here, in the UK, as similar schemes in Europe remains to be seen. Let's hope so. Our car industry would certainly benefit from changing up a gear or two.