Car scheme set to be scrapped by spring

The UK car scrappage scheme, which has offered sizable discounts on new vehicle purchases when trading in older models, looks set to run out of funds this winter, bringing the programme to a close.

According to Reuters, more than £300 million, or three quarters of the scheme's budget, has been allotted to citizens trading up their existing vehicles.

Numbers from the Department for Business, Innovation and Skills project the programme to come to a close in February. The department also stated that quotas will be implemented to ensure the cessation of the project goes smoothly, with brand manufacturers each assigned a specific number for trade-ins.

Business Secretary Lord Peter Mandelson praised the scheme's effect on the auto industry: "I'm pleased to see that the scheme has been taken up by so many people, supporting our automotive manufacturers through a very difficult time," he said.

Since its introduction, the scrappage scheme has accounted for more than one fifth of new car sales, according to figures released by the Society of Motor Manufacturers and Traders.

The programme also extends its benefit to the car insurance industry through new policies, as well as lessening environmental impact through the purchase of more fuel-efficient and carbon friendly models.

Though the scheme will conclude in the coming weeks, Lord Mandelson remains optimistic regarding its legacy. "Industry figures have reflected the success the scheme has already had, boosting both car sales over the past few months and maintaining jobs in car production," he said. "We expect the impact of the scheme to continue to be felt into 2010 as deliveries will continue after the scheme closes."

Wed, 27 Jan 2010 01:48:00 GMT