Review hits cleaner car grants

Tuesday, December 21, 2004

The future of grants for motorists buying cleaner cars has been left in limbo after the Department for Transport (DfT) announced a shake-up of the existing system.

Latest News

The future of grants for motorists buying cleaner cars has been left in limbo after the Department for Transport (DfT) announced a shake-up of the existing system.

The DfT said it will unveil a new system of grants by the end of January 2005, which it hopes to introduce in April. It has not said which cars may be eligible for grants, however, nor how much each will be worth.

TransportEnergy, the government agency working to reduce carbon dioxide emissions from road transport, has proposed that grants be pegged to carbon dioxide output. The organisation thinks this may have found favour with the DfT. It would make conventional diesel and petrol-powered models eligible for grants as well as bi-fuel models and hybrids.

Whatcar.com editor James Harding said: ‘TransportEnergy’s proposals would allow more motorists to apply for grants, but with no extra funding committed by the Government, the amount of cash available to each car buyer may fall.’

The Society of Motor Manufacturers and Traders (SMMT) also said that the level of grants is likely to fall, pointing to the way in which funding ran dry in the final quarter of 2003 and was then cut back 30% in 2004 despite increased demand.

The SMMT said the DfT will struggle to introduce the new system in the timescale it has proposed, and is in danger of boosting demand in car markets which it will not then be able to match with funding.

Currently, petrol-engined cars converted to run on LPG and petrol-electric hybrid models (like the Toyota Prius and Honda Civic IMA) are eligible for grants from the DfT-funded TransportEnergy. They are worth up to £700 in England, Northern Ireland and Wales and £1000 in Scotland.

The DfT said any grants issued under this regime until March 31 will be honoured.

To find out which models are eligible for grants visit www.transportenergy.org.uk.