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Victim of its own success?

The end of the Government’s car scrappage scheme in March has led to a widely predicted lull in the scrap market for those specialising in end-of-life vehicles (ELVs), after 400,000 owners scrapped their cars.

Implemented to give the UK’s car manufacturing industry a boost following a downturn in sales as a result of the recession, the previous Government decided to offer vehicle owners the chance to scrap cars built before 1999 in return for £2,000 to put towards buying a new one. Lucrative when the scheme was going on, authorised treatment facilities (ATFs) are now feeling its absence.

“Many cars were scrapped prematurely through the scheme, so there is almost a shortage now,” explains Cartakeback.com manager Kathryn Byng. “We hear stories that some ATFs did four years’-worth of business in the time the scrappage scheme was going. People were getting rid of cars before they usually would have to take advantage of the scheme, so that brought their end-of-life forward.”

A survey from the Department for Business, Innovation and Skills (BIS) showed 56% of those surveyed would not have bought a vehicle at this time if the scheme had not existed. So it is reasonable to say that 56% of those surveyed may not have scrapped their vehicle either.

The British Metals Recycling Association (BMRA) remains positive that this lull is temporary, although it expresses concern that the UK car manufacturing sector will remain weak and have a knock-on effect on the scrap market. Director general Ian Hetherington says: “As the vehicle scrappage scheme ended there was a predictable drop in the number of ELVs being treated. Over time it is gradually being restored to a historically normal level.”

Byng continues: “Actually, some sites have had their busiest ever year, so they are relieved now that they actually have time to do other things. At the time of the scheme, it was all about collections, collections, collections and then ATFs had so many certificates of destruction (CoD) to issue so the manufacturers could give the drivers their subsidies and therefore their new cars, as quickly as possible. In some cases, the cars are still sitting on ATF sites waiting to be treated because they simply have not had time to crush them and sell off the parts.”

Meanwhile, BIS believes the scheme was a success for car manufacturers and scrap traders alike. A spokesman adds: “It is too early to make a detailed assessment of the impact. But it does appear that the increased number of ELVs that arose because of the scheme had a positive effect for the vehicle treatment and recycling sector. Numbers of ELVs normally fluctuate in line with new car sales. Without scrappage, the sector could have faced a noticeable downturn in business during this period.”

Byng and the BMRA are now calling on the Environment Agency to further crack down on sites which illegally de-pollute cars and sell on their parts, so that more cars reach legal sites and boost arisings. Byng says that 500,000 of the two million cars which are scrapped each year go through illegal channels.

Hetherington says: “More can be done to help licensed ATF operators. The removal of the ‘scrapped’ option from the DVLA’s V5 form is a welcome first step in restricting unlicensed trade of ELVs, and is something we have been seeking since the introduction of the ELV Directive.

“The next step is for the DVLA to tighten the rules on CoDs. They need to have the same legal status that is currently used for cars declared off the road [a Statutory Off Road Notice]. The problem of unlicensed recycling will continue until this issue is addressed.”

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