The govt says it won't put more money into new-cars-for-old scheme. So the funds could run dry as early as next month.
Business Secretary Lord Mandelson has said a firm ‘no’ to calls from the car industry to extend the scrappage scheme.
This began in May and offers owners of cars at least 10 years old a minimum of £2000 for their vehicle if they trade it for a new car. The scheme is due to run until February 2010, or until the £300m of government funds set aside for it are used up. That cash provides £1000 for each deal – which car makers match – and also pays for the scheme’s admin costs. With the number of cars bought via the scheme approaching 200,000, cash is running low and, it is predicted, could run out as early as next month.
Lord Mandelson had he had no plans for ‘renewing or extending’ the scheme. His words will come as a disappointment to Hyundai, the make that has benefited most from the scheme. Sales have soared and its i10 and i20 cars have figured among the UK’s best sellers this summer. The make has also recruited 10 more dealers to cope with demand.