SCRAPPAGE SCHEME:A SCRAPPAGE scheme for cars of 10 years or older will mean a €1,500 reduction in Vehicle Registration Tax (VRT) on the purchase of a new low-emissions car when an applicable used car is traded in against it.
An estimated 600,000 used cars could be eligible, according to the Society of the Irish Motor Industry (Simi). The likely increase in new car sales is reckoned to be between 10,000 and 15,000 due to the scheme. Difficulties in accessing credit and low consumer confidence are expected to limit the appeal of the scheme.
While it only applies to the purchase of new cars with emissions of less than 141g/km, several diesel versions of new family cars like the Ford Mondeo, Renault Laguna and VW Passat fall into the scheme, along with some diesel versions of larger premium models from Audi, BMW, Volvo and Mercedes.
Of the 57,151 new cars sold so far this year, 66.5 per cent would have qualified under the scheme.
The scheme runs for one year from January 1st. Used cars must have been registered to the owner for at least 18 months and must be scrapped 60 days before or after the new car is registered to be eligible. The car must have a valid NCT certificate or one that expired less than 90 days before being scrapped. The scheme will, however, apply to cars that failed the NCT test within the previous six months. Finally, the cars must have been insured for at least 12 months in the 18 months prior to being scrapped.
Alan Nolan, director general of Simi, said the scheme was a great relief to industry. “Given the terrible year we’ve been through, with 10,000 job losses in the industry, this gives those working in it a sense that perhaps the worst may be over. And, for customers, the €1,500 rebate is substantial enough to make a difference on the price of smaller cars.”
New car sales are expected to end the year at 57,000, down 62 per cent on last year. “With the scrappage scheme next year’s sales could be brought up to 65,000 or 70,000,” said Mr Nolan.
Several car firms reacted last night by adding their own discounts on low-emissions models.
Friends of the Earth described the scheme as a waste of money. Oisín Coghlan said: “Most of the money will go to overseas manufacturers. It would have been far better to wait until the infrastructure was there to allow electric cars go mainstream.”
A previous scrappage scheme ran from July 1995 until the end of 1997.