What is car scrappage?

By Stuart Johnston

Car scrappage is a scheme to incentivise owners of old, unsafe or environmentally-incorrect cars to scrap them, and thereby earn a hefty rebate on a new car.

The scheme has been in place in Europe and America for a few decades, but really took off during the global economic crises of 2007-2008.  At that time, countries all over the world offered government-backed scrappage incentives to trade in an old banger and thus stimulate sales of new cars.

America, for instance, contributed a massive 3-billion dollars (approximately R36-billion rand) to its federal-backed scrappage scheme, which proved so popular that the incentive was withdrawn after less than a year.

Now Motor Companies offer scrappage schemes

Since then, motor companies have been offering their own scrappage scheme, many of them focussing on older diesel models built before 2008. Such is the anti-diesel sentiment in Europe and the UK, that these schemes have proved popular. Audi, for instance, will offer a 2 000  British pound (about R34 000)  incentive if you scrap your old diesel and trade up to a new Audi Q1 or A1, and up to 8 000 pounds (about R135 500)  if you order a new Q 7 e-tron. The idea is to promote the most fuel-efficient cars with the lowest emission readings in the range.

No vehicle scrappage here

In South Africa, there is no vehicle scrappage. Private individuals or insurance companies do, of course,  scrap cars, but most of these have been badly damaged and labelled as “write-offs” in accidents. There is no incentive to offer up your old barely-driveable banger for scrapping.

Taxi Recapitalization Scheme is a toe-in the-water scheme

The closest South Africa has come in recent years to scrappage was with the implementation of the Taxi Recapitalization Programme, instated in 2005-2006. This scheme , backed by the South African government, offered incentives of R50 000 per taxi, for taxi operators to scrap their old, un-roadworthy and hazardous taxis to trade up to a brand new taxi. Although the scheme is still in place, it has not been nearly as successful as envisaged, back when the scheme was first drafted in 2004.

“South Africa needs a scrappage scheme”

A manager of a Randburg panel-beating and vehicle repair centre told AutoTrader that South Africa urgently needed a formalised scrappage scheme.

“So many cars that shouldn’t be repaired after an accident are turning up on our roads with dodgy repairs. What’s more, there is a big illegal trade in operation, where the bare chassis of badly-damaged popular cars are bought, and then fitted with stolen parts, to resemble new or almost brand new models. This is one of the reasons why there is such a high theft rate of popular cars like VW Polos, Hyundai i20s, Toyota Corollas and the like

“With a regulated scrappage system in place, these cars would be taken off the roads and recycled, cutting down on accidents, and on the theft of new cars.”