ULEZ scrappage scheme: What retailers need to know
TfL extend scrappage scheme to all Londoners as ULEZ expansion goes ahead - What retailers need to know.
After listening to the concerns of Londoners over recent months, the Mayor announced today (4th August 2023) that to make the transition to a greener city easier, the scrappage scheme will be extended to every Londoner affected by ULEZ, along with a host of other significant changes.
What’s included in the scrappage scheme?
From Monday 21st August
Every Londoner with a non ULEZ-compliant car will be eligible for a £2,000 grant
Small businesses and sole traders will be able to receive up to £21,000 in grants to scrap up to three vans
Charities will be able to receive up to £28,000 in grants to scrap up to three minibuses
From today, Friday 4th August:
Small businesses and charities with a non-compliant van will receive increased payments of £7,000 (up from £5,000)
Grants for Wheelchair Accessible Vehicles will increase from £5,000 to £10,000
Grants for scrapping for non-compliant Minibuses will increase from £7,000 to £9,000
Grants to Replace a non-compliant van with electric van increase from £7,500 to £9,500
Grants to replace a non-compliant minibus with an electric minibus increase from £9,500 to £11,500
Retrofit grants increase from £5k to £6k, typically enough to cover the whole cost of retrofitting
To find out more visit https://tfl.gov.uk/modes/driving/ultra-low-emission-zone/scrappage-schemes/car-and-motorcycle
In Summary
Any Londoner living within the extended ULEZ zone can scrap a non-compliant car for £2,000
Grants for scrapping non-compliant vans and minibuses will increase by £2,000
Grants for scrapping non-compliant wheelchair accessible vehicles will increase from £5,000 to £10,000
Consumers will be able to use the grant as cash, meaning they can purchase their next vehicle from any retailer or private seller.
What does this mean for retailers?
This is likely to bring increased demand for compliant cars, vans and minibuses and a decrease in demand for those that are non-compliant in Greater London and the surrounding areas
Demand is expected to be high for the cheapest compliant cars, particularly in the sub £5k category
Demand for compliant vans and minibuses likely to be spread across a broader price range
Sourcing compliant cars and vans at the more affordable end of the market is likely to become increasingly competitive as retailers seek to fulfil increased demand
What should retailers do?
Flag compliant cars in the advert description
Advertise the scrappage scheme as an incentive on cheaper compliant stock
Regularly update pricing in-line with the live market for compliant vehicles in high demand
Utilise data to identify profit opportunity on compliant cars
Consider how to trade out of non-compliant cars (Greater London and surrounding areas)
Multi-site groups should distribute compliant and non-complaint stock to maximise profit opportunity
Map of the new ULEZ zone from TFL Website
How can your buyers access the grant?
Consumers apply for the grant online through the Transport for London website - The information on starting your application is towards the bottom of the page.
They will need to upload a copy of the V5c and proof of insurance – The V5c must be registered to the current keeper before 30th January 2022.
The vehicle must be disposed by an Approved Treatment Facility (ATF) – You can locate an approved facility here
What is Auto Trader doing to support consumers?
Consumers are likely to have questions about how to access grants and if their current vehicle is compliant. We’ve updated our scrappage scheme articles to keep consumers informed and we’re exploring ways to highlight compliant vehicles on our marketplace ahead of the expansion of the scrappage scheme on the 21st August. In the meantime, consumers can use the vehicle checker on the Transport for London website.
We’ll be discussing more on what this extension means for retailers at our next webinar on Wednesday 9th August.