Spain car subsidy scheme receives €175 million boost

Car owners can earn up to €2,000 from scrapping their old vehicle

Spain’s successful car scrappage scheme has been given a €175 million injection of capital by the government in an effort to generate an estimated €1 billion in additional related tax income.

Car owners wishing to take advantage of the scheme are eligible for a price reduction of up to €2,000 when they scrap their old car and buy a brand new one. The scheme is partly funded by the government and partly funded by carmakers…

This latest expansion of the coffers available is the fourth time the scheme has been injected with cash, taking the total amount invested into it to €465 million. Cars in Spain generate tax revenue for the government through VAT and a registration tax, meaning a buoyant car resale market helps generate increased tax revenue.

Figures for December reveal that Spanish car sales increased in volume by 18.2 per cent, marking the fourth month of growth in a row. Overall in 2013, the market increased by 3.3 per cent, according to Spanish carmakers’ association, Anfac. Such an increase is yet another indication that consumer confidence has returned to many areas in Spain.

Spain was one of only two EU nations to record any significant growth in its car sale market for 2013, along with the UK. All other major markets posted a decline in sales, including those of France and Germany. The latter, however, remained the market leader overall, thanks to its strong economy and robust car manufacturing market.