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SIGNS that the government could give discounts of up to £6,000 to drivers switching to electric or hybrids from petrol and diesel could  provide a double stimulus.

The Daily Telegraph has reported that the Prime Minister could make an announcement in his speech next month aimed at kick-starting the UK economy.

Vehicle makers, the SMMT and dealers have been calling for discounts or a scrappage scheme to help boost sales following months of pandemic shutdown.

It would also help the move towards electrification to allow the UK to meet its climate change and emissions goals by 2035.

This is important for Leasing Brokers and SMEs.

Graham Prince, Relationships Director at the Leasing Broker Federation, said: “2035 is only 14 years away and if you think about length of leases, that is less than five renewal cycles.

“Fleets have big changes to make within a relatively short time period. Electric vehicles should already be included in their Fleet choices and serious consideration should now be given to how a Fleet Policy/Car Park will look like moving forward.”

According to news reports, a new scrappage scheme could be part of a series of ideas designed to ‘level-up’ the economy and likely to be similar to to that introduced in 2009 following the last financial crisis.
It gave buyers £2,000 off a new car if they scrapped a model aged 10 years or older with a further £1,000 from manufacturers. The scheme ran for 10 months.
The Coronavirus has hit the new car market hard, down 97% in the UK in April and 89% in May. The PM’s speech is currently scheduled for July 6.

 

AA President Edmund King said that such a grant would help  both car manufacturers and air quality although it should be part of a wider package of investment into the car industry to boost battery technology, electric vehicle charging infrastructure and jobs.

Speaking to Sky News Marshall Motors Group’s Chief Executive Daksh Gupta said: “We would welcome any stimulus for the sector, whether that be a scrappage scheme, grants or some form of VAT discounting. Stimulus is needed for the sector.”

He later tweeted that the sector is “a cornerstone of the UK economy, £18.2bn paid in taxes and employs 800,000 people. We work off small margins, typically 1% with significant costs. So it’s clear to see, we need support.”

James Hind, Chief Executive of carwow, the car buying comparison site, said: “In 2009 when the government introduced a scrappage scheme there was a huge increase in new car sales as a result.

 “We support that the scheme should further encourage electric vehicle buyers, but strongly advise that any scheme should also encourage plug-in hybrid and hybrid purchases as well.

“The reality is that there is a relatively limited number of pure electric cars still that consumers can choose from, and most are far more expensive than the average new car on sale.

“Extending the scheme, even if at reduced contributions, to plug-in hybrids and hybrids would help encourage far more people to trade-in more polluting older cars and help the industry.”