The ‘cash for bangers’ scheme from the Government valued at £400m ended this week after boosting the sale of many new autos by encouraging many people to scrap their older vehicles.
The initiative was introduced last May and since then has offered drivers of older cars to exchange them for £2,000 to put towards a newer vehicle.
The Government enacted the scheme after it was proven to be successful abroad in other countries.
The cost of the £2000 grant was split between the motor industry and the Government and resulted in an immediate effect on how many new car sales were sold which had been stagnant since the start of 2009.
However, by July of 2009 monthly new car sales showed improvement in year on year averages for the first time in the previous 15 months. Since this time period new car sales have continued to show improvement.
The car industry called the scheme a success with the Society of Motor Manufacturers and Traders stating that it offered a vital stimulus to the auto sector during the economic recession which proved to be hard on the sector. The Society continued to state that while the market is expected to slow a bit with the ending of the scheme, the rise in business and fleet demand is expected to help alleviate the impact.
Business Secretary Lord Mandelson stated that the scheme was always meant to be offered on a limited time basis, but that the Government is pleased to see that it was able to deliver the intended results.
