Time was when scrap dealers charged you to get rid of your old car. But today that pile of old junk could be worth £2000 through the Government scrappage scheme. But there are lots of ifs…
First – you have to trade it in for a brand spanking new car. Not a nearly new. Not one the dealer has used as a demonstration model. But an unregistered car that no-one else has owned and which is specified for the UK market. It does not have to be ‘green’. Though the chances are it will be greener than the POJ (pile of old junk).
Second – the POJ has to be yours and have been yours for at least 12 months when you trade it in. So you cannot buy a POJ from the small ads or your unsuspecting cousin and magically transform it into a two grand discount!
Third – although it is a pile of old junk it has to be legal. It must be be taxed, MOT’d and insured. If it is not being used – even if it has a Statutory Off Road Notice (SORN) – it is not eligible.
Fourth – it has to have been registered on 31 August 1999 or earlier. In other words it is a T-reg car or older. And it must be registered to a UK address.
Fifth – do not delay. The scheme is limited to the first 300,000 people who apply. Now that may sound a lot but there are more than five million cars on the road which are old enough to qualify. When it’s gone it’s gone. And in any case it ends on 28 February 2010.
If you do go for the new scheme you may also save money on the car tax (technically known as Vehicle Excise Duty or VED). An old banger will cost either £125 or £190 a year depending on engine size. New cars are taxed at anything from £0 (yes zero) if they have very low CO2 emissions to £120 if they are middling to £405 if they are real gas guzzlers. So if you buy a small, low emission vehicle you could find it costs you less each year.
Sadly your insurer will not join in the money saving party. There will be a fee of around £20 to issue a new insurance certificate. And the premiums for a new car may be higher.
But if you were thinking of upgrading from POJ to new, the scrappage scheme could save you £2000.