London's ULEZ scrappage scheme explained

What is ULEZ?

The Ultra Low Emission Zone (ULEZ) is an area of London where owners of the most poluting vehicles must pay a fee of £12.50 to drive. ULEZ initially covered central London, but was expanded to the North and South Circular roads, and will cover all of Greater London in the summer as mentioned above.

What vehicles are affected by ULEZ?

Vehicles that do not conform to ULEZ include: cars motorcycles that don't meet Euro 3 standards (pre-2007), cars and vans that don't meet Euro 4 standards (pre-2006), and diesel cars and vans that don't comply with Euro 6 requirements (pre-2015).

How does the scrappage scheme work?

The scrappage scheme introduced last week is aimed at those with a low income or disability benefits, with cars that don't meet the ULEZ requirements. Applicants can claim up to £2,000 for scrapping a non-compliant car, or £1,000 for a motorcycle.

The scheme includes eight options, such as taking £1,600 and an adult bus or tram pass. There is also a scheme for charities, business with up to 10 employees, and sole traders that offers £5,000 to £9,000 to scrap or retrofit a van or minibus that does not meet the Ulez standards. 

How does this scheme compare to previous scrappage schemes?

Transport for London (TfL) ran a scheme from 2019 to 2021, offering drivers up to £2,000 for their car and £1,000 for a motorcycle, just like this new scheme.  TfL claims that this £61m scheme helped scrap approximately 12,000 of the most polluting cars. In 2009 there was a nationwide scrappage scheme which offered people £1,000 towards a new car from participating manufacturers, which would offer an additional £1,000. Driver's had to have owned the car for at least a year and it had to be at least 10 years old.

How will the scheme affect used car prices?

The used car market is still facing a stock shortage as a result of car production coming to a halt during the Covid-19 pandemic. This new scheme will remove many of the cars that are in short supply, thus increasing the values of more recent models that are already up 10 per cent year on year, according to market valuation site, CAP HPI.