25 million motorists would support "cash for bangers" scheme

As the country awaits confirmation in Wednesday's Budget that the Government will follow in the footsteps of Germany, France and Italy and introduce a "car scrappage scheme" for older vehicles, new research from uSwitch.com reveals that 25 million motorists (80%) would consider ditching their veteran vehicles for the cash incentive. If all of these motorists were eligible for the scheme, the government would need to invest £50 billion in an attempt to kick start the industry. With proposed investment caps in place of just £560 million, it seems there will be quite a few disappointed motorists as only 280,000 people will benefit - this is just 1% of all cars in use in the UK.

The research also reveals that the main factor encouraging car owners to take part in the scheme is the hard-cash incentive. Over half (51%) of interested motorists stated it would offer them an opportunity to upgrade to a new car which, without the extra cash injection, would be out of reach. However, the environmental benefits that such a scheme could generate is also a persuasive factor, with 37% of interested motorists saying the main reason for participation in the scheme would swap their car for a greener model. Interestingly, 8% of would-be car swappers cited that their main incentive for participation would be to ‘do their bit' to support the struggling car industry.

Sadly, opinions remain divided as to how much impact this initiative would actually have. Critics claim that a scrappage incentive scheme would mainly help foreign manufacturers. This is because 75% of vehicles produced in the UK are exported, and 86% of new UK vehicle registrations are manufactured abroad. Despite the UK's scepticism around the effectiveness of this project, a similar "cash for bangers" scheme for cars over nine years old that has been introduced in Germany has seen the car manufacturing market expand by 39.9% in the last month. Citroen has already laid down a gauntlet in the UK by creating its own scheme which offers anyone with a car registered before 2000 a £2,000 donation towards a new vehicle.

With the car industry already taking a financial battering from the current recession it seems the government needs to take some action urgently to turn the situation around. The Society of Motor Manufacturers and Traders claims that 800,000 jobs across the industry are at risk if Government support is not forthcoming. With March car sales already down by 30.5% and a decrease by of 200,000 units since the start of 2009 the situation urgently needs to be addressed.

Mark Monteiro, Insurance Expert at uSwitch.com comments: "Undoubtedly, this sector has been one of the hardest hit by the onset of the recession in the UK. However, this research indicates that many UK motorists would be in support of a car scrappage scheme for older cars, in exchange for a cash incentive of £2,000 towards a new vehicle. Motorists actively want to be able purchase new cars but are financially restricted as everyone tightens their purse strings during the downturn.

"Whilst early indications suggest the scheme is working well in Germany, with a large increase in new car manufacturing, the research has also indicated a desire by motorists to upgrade to a greener vehicle with lower emissions, which would also benefit the environment."