Wednesday's Budget should bring much-needed incentives for car drivers. Here's what it may have in store for us!
Will Wednesday’s Budget announcement by Chancellor Alastair Darling bring drivers long-awaited incentives to go out and spend, spend, spend on cars?
The biggest expected move will be the introduction of a cash-for-scrap scheme, intended to tempt drivers of old cars to exchange them for new cars, or used ones up to a year old. This widely-touted plan will (probably) work like this.
You own a car that’s at least nine years old. You take it to an approved scrapper and exchange it for a coupon. You take the coupon to a dealer, who will give you a £2000 discount on a new or nearly new car.
We must wait until Wednesday to hear the exact allowances and other conditions. But if such a scheme gets the nod, it is unlikely to come into effect quickly because of the amount of work needed to set it up and ensure that it runs effectively. Don’t expect anything before June, at the very earliest.
The other likely area of relief for buyers is the ‘showroom’ tax proposed last year. This would be a one-off cost applied to big-engined, heavy polluting vehicles bought new. The Society of Motor Manufacturers and Traders, who represent the motor industry, is lobbying hard for its removal.
It’s more likely, though, that the Chancellor will postpone this until car sales pick up. They are currently in the doldrums: where in 2008 UK dealers saw over 2 million new cars roll off their forecourts, industry estimates are that this year the total could fall to just 1.6 million.