ULEZ Scrappage Scheme Explained

Yesterday London Mayor Announced a New Scrappage Scheme – here are the deets

To go with the forthcoming ULEZ Expansion in August, London Mayor Sadiq Khan has announced the biggest ever vehicle scrappage scheme.

ULEZ is the ultra low emission zone introduced in Central London in 2019, and expanded out to the North and South Circular last year. Basically if you have don’t have a Euro 3 motorbike, usually after 2007, a Euro 4 petrol car, usually after 2005 and a Euro 6 diesel, usually after 2015, you have to pay £12.50 to drive within the zone. That also includes if you live within the zone.

Anyway this scrappage scheme, like previous such schemes is supposed to be the saviour for those who don’t have a ULEZ compliant car but need a vehicle to get around.

So the good news is, that it’s a £110 million pound scheme launched today, double the amount of funding that was available for previous schemes. People can apply for cash grants of up to £2000 to scrap their car or bike and put that money towards a replacement. Businesses, charities and sole traders can apply for grants up to £9,500.

Keep in mind though, this is not available for everyone. Its’ for those on low incomes, so means-tested benefits, plus those on disability benefits. And for businesses it’s for those with 10 of fewer employees. So if you have 11 employees, you’ll need to sack someone sadly.

There are also ULEZ offers such as discounts and subscriptions, rentals and purchases of bicycles, e-bikes and cargo bikes. Those applying for the £2000 grant, can also go for an alternative like getting two free annual bus passes along with a lower cash grant.

Meanwhile those with disabilities who have to scrap a wheelchair accessible vehicle can apply for up to £5000, and can also apply for a nominated driver at a different address if they don’t actually drive themselves.

Back to the small businesses and charities, they can apply for £5000 to scrap a van, £7000 to scrap a minibus, £5000 for a retrofit van or minibus, and up to £7500 or £9500 if they choose to upgrade to a fully electric van or minibus respectively.

There’s also an exemption up to October 2027 for recipients of certain disability benefits (so blue badge holders) – or a nominated driver, and for all wheelchair accessible vehicles and adaptive vehicles. This is also available to people living outside of London.

The annual £10 charge for auto pay registration is being removed, but the fine is being increased to £180, though it gets reduced again to £90 if you pay within 14 days.

Apparently 94% of cars in the central London existing ULEZ zone are already compliant. In outer London, only 85% are compliant, which means 15% are not. This is expected to impact about 200,000 vehicles

Now the bad news is of course that the scrappage scheme is not available to everyone. Keep in mind that the price of an average used car is nearly £18,000, that’s up from about £13,000 – nearly £5000!

Electric used car prices – and of course being that this is an air pollution-related public health emergency it would be logical to consider an EV – are higher. You’d be looking at over £23,000 for an average used EV. And of course new EVs are typically over £40,000 although there are some like the brilliant MG4 from as little as £26,000.

For both new and used cars, we are suffering from severe supply shortages, so even if you can afford to buy a new or used petrol or electric car, you may not be able to find one. And with ULEZ coming in and further driving demand for these cars, expect it to become even harder for Londoners to replace their cars. There was a report recently on the news of one van company admitting they simply didn’t have enough vans to keep up with demand, and prices would be going up.

Think also about like-for-like replacements. Yes, okay, you could buy a ULEZ compliant old petrol cars, post-2005, for under £2000. It’s still just about possible. It may not be the greatest quality car, it may need further running repairs and maintenance that would add to your costs.

And it may not be quite as suitable for your needs as the one you have to get rid of. For example most families in outer London, who may need a car to get the kids to school and the dog to the park, are probably running older diesel SUVs. SUVs being large, spacious and highly versatile, it’ll be a real step down to switch into a small ULEZ-compliant car instead.

All of this and I don’t even want to get into the impact the ULEZ expansion is having on people like me – but I can’t help touch on it. I drive a 33-year old classic, a 1989 BMW E30. It brings a lot of joy to me and people that see it. But only classics older than 40-years old are exempt. I’ve spoken about this issue extensive in this video in which I also warned about the irreplaceable losses to our automotive heritage that scrappage schemes can inflict.

I would strongly urge anyone with a classic, or anything you might deem collectible, to NOT immediately scrap it, if you are eligible for the scheme. Please, please, refer it to the classic car community first, even if it’s in bad condition. The classic car community might still want to rescue and restore it.

Here’s where you apply for the Scrappage Scheme https://tfl.gov.uk/modes/driving/ultra-low-emission-zone/scrappage-schemes/car-and-motorcycle

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