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London gets £23m van scrappage scheme ahead of ULEZ

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London Mayor Sadiq Khan has announced plans for a £23m van scrappage scheme to help small businesses cope with the impact of the London Ultra-Low Emissions Zone (ULEZ).

The ULEZ comes into force in Central London on 8 April 2019 and will levy a charge of £12.50 per day on vans which don’t meet the Euro 6 emissions standard.

The scrappage scheme will be available to “micro businesses”  — those with less than 10 employees. Business owners will be able to apply for funding to help them meet the cost of scrapping non-Euro 6 vans and replacing them with compliant models.

Details of the scrappage scheme have not yet been announced, so it’s not known how much cash will be provided to owners wishing to update their vans. However, the Mayor’s office has said that the scheme should be in place “ahead” of the introduction of the ULEZ in April.

Given that this is now less than four months away, time seems tight to me. Applying for funding and buying a suitable new vehicle could soon become difficult within the time period. But it’s good to see that something is being done to help meet the cost of replacing older vans that are driven into central London.

Another concern is that even with the scrappage allowance, buying newer vans could be unaffordable for many small businesses. Used van prices remain high — according to auctioneer BCA, the average used van fetched £7,146 in November, an increase of 5.1% compared to the same month in 2017.

As I’ve written before, for van operators with older vans who only drive into the ULEZ area occasionally, hiring a van could be cheaper than buying a newer one. It’s certainly worth crunching the numbers yourself before rushing out to buy a new van. You might be surprised.

To learn more about the ULEZ, including vehicle and post code checks, click here.

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