ULEZ scrappage schemes: how to save money on a clean car

If your vehicle doesn’t meet the new, stricter Ultra Low Emission Zone (ULEZ) standards, you’ll need to pay £12.50 to enter central London. You can read about the ULEZ and what it means to you or your business here.

Buying a new car or van that meets the emissions standards is one way to avoid the daily charge. However, this will either involve spending more money up front or signing up for a lengthy finance deal.

Either way, the ULEZ is going to cost you money if your existing vehicle is deemed to be too dirty for London.

ULEZ van scrappage scheme

If you’re the owner of a micro business or a charity, you can apply for the Mayor of London’s scrappage discount, with up to £6,000 available for eligible organisations. The scheme was announced at the end of 2018, with Sadiq Khan allocating £23 million to the van scrappage scheme.

To qualify, a micro business must meet the following criteria:

• Have ten or fewer employees
• Have a turnover up to £632,000, OR up to £316,000 balance sheet total in the preceding and current financial year AND
• Have an active Companies House registration in the UK OR be VAT registered in the UK

Charities must be registered with the Charity Commission as an active charity.

Eligible organisations can scrap up to three older, more polluting vans and charity minibuses, but the vehicle(s) must meet certain criteria, in addition to failing to meet the ULEZ standards. The requirements are:

• The vehicle must have been owned by the business or charity for more than 12 calendar months before 22 February 2019
• Insured for business use
• Have a valid MOT and current VED
• The vehicle must be scrapped at an approved Authorised Treatment Facility (ATF)

There are three different scrappage funds available, and these are summarised by Transport for London (TfL) as follows:

Option 1: Scrappage for frequent users of the Congestion Charging Zone (CCZ) (£3,500)

The vehicle being scrapped must:

• Have been driven within the CCZ at least 52 times during the six months before 22 February 2019 – this will be checked against existing transactions in your London Road User Charging account
• Be a pre-Euro 6 model light van (or charity-owned minibus) that does not meet the ULEZ standards

Option 2: Scrappage and purchase/lease of Euro 6 replacement (£3,500)

The vehicle being scrapped must be:

• A pre-Euro 6 model light van (or charity-owned minibus) that does not meet the ULEZ standards
• Replaced (by purchase or lease) with a Euro 6 light van or Euro 6 minibus (for charities only)

The micro business or charity must be registered at a Greater London address.

Option 3: Scrappage and contribution towards running costs (including insurance) of an electric vehicle (£6,000)

The grant payment is made up of £3,500 for scrapping eligible vehicles plus a £2,500 contribution towards running costs (including insurance) of a replacement electric vehicle(s).

The vehicle being scrapped must be:

• A pre-Euro 6 model light van (or charity-owned minibus) that does not meet the ULEZ standards
• Replaced (by purchase or lease) with an electric light van or electric minibus (for charities only)

ULEZ scrappage for lower incomes

In February, the Mayor of London announced a new ‘scrap for cash’ fund to help low-income Londoners get behind the wheel of a ULEZ-compliant vehicle. Although Sadiq Khan hasn’t released details of the scrappage discount, £25 million will be available and the scheme will be launched later this year.

At the time, Khan said: “Our country’s filthy air is a national disgrace that shortens lives, damages our lungs, and severely impacts our NHS. City leaders across the country are united in raising the alarm about the dangers posed by poor air quality.

“I’m announcing plans to help motorists on low incomes, as well as micro businesses, to scrap their older, more polluting vehicles.

“However, Ministers must now show they can match my commitment. If we’re going to tackle the health crisis and social injustice caused by air pollution it is vital and only fair that a national vehicle scrappage scheme is funded and supported by the government.”

To check if your existing vehicle meets the ULEZ standards, visit the Transport for London website.