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Car scrappage allowance could become a goldmine

It has been revealed that only days after the UK government announced an allowance programme for those scrapping older cars there are a significant number of loopholes in the proposals. Apparently, cars which are no longer roadworthy and effectively "off road" can still be traded in with the owners receiving upwards of £1000 for the vehicle.

There are concerns that the allowance being made available to car owners, which need to be matched by car retailers in the UK, could well be used to acquire sports cars, 4x4 or luxury saloon cars. They were a staggering 4.3 million cars registered off-road in the UK over the last 12 months and while at some stage they would have been scrapped they have become something of a goldmine for their owners.

Even at this early stage it is highly concerning that loopholes have materialised and the system could be open to abuse from day one. Aside from the fact that sales of more fuel-efficient vehicles have soared over the last 12 months, negating the need for a scrappage allowance, the cost to the UK taxpayer will be significant. It would appear there needs to be significant changes made to the structure of the allowance proposal in the short term otherwise this could become a very expensive white elephant.

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