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Scrappage: Your essential guide to new scrappage scheme

All you need to know regarding the Government’s £300m vehicle scrappage scheme.

Fact file:

  • Scrappage scheme began on May 18 and ends on February 28 next year or when government funding of £300 million runs out.
  • The £2,000 discount is applied to the invoice price, including VAT. In effect, the Government’s stated £1,000 contribution is £870. As a result, the Government will actually gain from the scheme.
  • The car or light commercial vehicle (up to 3.5 tonnes) must have been registered in UK before August 31, 1999.
  • Manufacturers can issue three months’ notice to leave, or one month’s notice to join.
  • Participation is voluntary, so dealers can negotiate an opt-out with their manufacturer.
  • The vehicle must have been registered in the UK to the person making the claim and owning the new vehicle for the previous year.
  • The same name must be on the V5 for the old and new vehicles.
  • At the point of order the old vehicle must have a valid MoT or one that expired no more than two weeks previously.
  • The old vehicle must have a valid tax disc and insurance. Once the transaction is complete the disc can be removed for a refund.
  • Before the start of scrappage scheme on May 18, old vehicles declared SORN were also eligible. However, this is no longer the case. All orders placed before May 18 involving a SORN vehicle will have the funding contribution honoured.
  • The new car manufacturer’s ELV authorised treatment facility (ATF) will collect the old car at no cost to the dealer. A copy of the certificate of destruction (CoD) will be provided within three days.
  • Alternatively, the dealer may sell the old vehicle for scrap providing he gets its CoD.

The process

The dealer verifies the consumer is eligible for the scrappage discount.

The order is placed and the dealer completes a data sheet stating the customer’s details,
dealer’s details, old vehicle’s make, model, registration and VIN, new vehicle order date and proposed delivery date.

This is submitted to the vehicle manufacturer, which tells the Government of its scrappage scheme orders every Wednesday, at which point the Government contribution is ring-fenced.

The dealer must get the new vehicle within four months. If the vehicle takes longer than four months to be delivered to the dealer the funds are reallocated. A new claim may be submitted, depending if sufficient funds remain.

The dealer sends its manufacturer a data sheet with the new vehicle’s registration number, VIN and CO2 emissions and date of delivery, the old car’s certificate of destruction number, ATF where it was scrapped, MoT certificate number and MoT expiry date.

The manufacturer sends the Government these details. It will receive the Government’s £1,000 within 10 working days. The manufacturer must then pay the £2,000 scrappage contribution to the dealer within a further 10 days.

Audit trail

Dealers must be prepared for scrappage audits and must hold or record a copy of the V5C registration certificate of the old vehicle; the MoT certificate (or the Hackney Carriage Licence as appropriate) for the old vehicle; a copy of the invoice for the new vehicle; details of the new vehicle, including the registration number and VIN; and a copy of the certificate of destruction for the old vehicle.

Useful contacts

Take the RMIF and AM Dealer Scrappage Survey

Click here to take the survey

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