The used Car Scrappage Scheme

What is the Car Scrappage Scheme?

The Car Scrappage Scheme was introduced in the United Kingdom in May 2009. It is a measure which allows the government to fund the exchanging of an older car for a newer one in an effort to stimulate the faltering motor trade as a result of the recession. The government has agreed to reserve £300 million in order to fund the scheme, which equates to around 300,000 cars which can be traded in, at a cost of £1,000 to the government.


What criteria do I have to meet to be eligible for the scrappage scheme?

There are specific criteria which must be met in order to qualify for the scheme. These criteria mainly involve the age and ownership of the car:


  • The car must be at least 10 years old, having been registered on or before the 29th February 2000

  • The owner of the car being exchanged must have been so for at least 12 months prior to the exchange

  • The person buying a new car through the scheme must be the registered owner of the car being exchanged. This person must also be the registered owner of the new car.


How much will I save through the Car Scrappage Scheme?

You can save £2,000 by exchanging your old car for a new one wit the scheme. It is important to know that the car you are receiving in the exchange must be brand new, and you must be its first registered owner.

The government contributes £1,000 of this amount, with the other £1,000 coming from the car firm you deal with. They can choose to offer more than this amount if they wish, but £1,000 is the minimum amount they can contribute.

The car dealership is also responsible for submitting the required paperwork, with £2,000 being taken from the price of the car immediately.


Can I buy a foreign or imported car through the scheme?

No, the car must be registered and also have United Kingdom specification, e.g. right-hand drive. It is also not possible to visit the UK to take part in the scheme if the car has not been registered in the UK.


What’s to stop me buying an old car and making a profit from the scheme?

This can seem an easy loophole to exploit, but remember that the car must be registered in your name for at least 12 months prior to exchanging it through the scrappage scheme.


Can I trade my old car in, and then buy it back?

Once a car has been exchanged, it will be issued with a Certificate of Destruction, which will be examined by the government. After this certificate has been issued, it is not possible to retrieve the car or register it for further use.


Can I exchange my old van or motorbike?

You can trade in a light van which weighs no more than 3.5 tonnes. You can exchange a van for a car, or vice versa, as well as like for like. A van can be exchanged when it is over eight years old, but a car must be over 10 years old. The scheme does not extend to motorbikes, however.


Does my old car have to be road-safe to qualify?

Yes, all vehicles must be roadworthy and legal to drive, including having a valid MOT certificate and have had road tax paid on it. It is acceptable to gain an MOT certificate and pay road tax on a car before exchanging it.


I’ve heard you can only exchange a car for one with lower fuel emissions. Is this true?

This is true of the ‘cash for clunkers’ scheme in the USA, which operates a similar scrappage scheme. In the UK scheme, however, you are free to exchange your old car for any new, unregistered one.