Car and Van Discount Scheme Industry Seminar: 27 April 2009

1. Car and Van Discount SchemeIndustry Seminar: 27 April 2009

2. Key Features • Consumers offered £2k towards new car or van if they trade in 10 yr old+ vehicle which they have owned for 12 months • Incentive = £1k HMG/£1k industry • £300m funding = up to 300,000 sales • Launch mid-May • Finish 28 Feb 2010 or until funding used up

3. Key Features • Price transparency for consumers, dealers, manufacturers & auditors • Voluntary scheme for manufacturers & dealers • Applies to all manufacturers’ models • No limit to number of vehicles purchased per individual/business

4. Key Features • Only one discount per vehicle • No restriction on period of new car ownership • No restriction between scrapping car & purchasing van or vice versa • Fleet/motability customers eligible

5. Eligibility – old vehicle • Car or Light Commercial Vehicle not exceeding 3.5 tonnes. (N1 class) • First registered in UK on or before 31 August 1999 • Claimant keeper must have been registered keeper for at least 12 months before new vehicle order date

6. Eligibility – old vehicle • Registered keeper must have UK address • Current MOT test certificate • Vehicle clear of finance

7. Ineligibility – old vehicle • Not dealers trading in vehicles in their own name • Not stolen vehicles • Not insurance write-offs

8. Eligibility – new vehicle • New car or Light Commercial Vehicle not exceeding 3.5 tonnes • UK specification vehicle • First registered in UK on or after date of scrappage scheme launch and declared new at first registration in UK with no former keepers • Registered to same keeper as registered keeper of vehicle to be scrapped

9. Ineligibility – new vehicle • Not used cars • Not demonstrators • Not parallel/grey imports • Not order placed before scheme starts • Not retailer customers

10. How the process works: Consumer • No need for consumer to formally register or apply to the scheme (not a voucher scheme) • Consumer can check in advance that old vehicle and keeper details meet eligibility criteria. Dealers can provide further advice • Dealers to do the paperwork and arrange for old vehicle to be scrapped • £2k scrappage discount to appear on customer sales invoice

11. How the process works: Consumer • Consumer provides proof of identity, V5C for trade-in vehicle & MOT certificate • Consumer gives agreement to old vehicle being scrapped • Consumer agrees to collection and use of personal data for vehicle discount scheme • Consumer agrees to being contacted by BERR for monitoring purposes

12. How the process works: Dealer • Dealer checks old vehicle eligibility and customer identity details • Notifies manufacturer when order placed under scrappage scheme & proposed trade-in vehicle details • Following delivery of new vehicle, arranges destruction of old vehicle through ATF and retains copy of CoD • Dealer notifies manufacturer that transaction is completed

13. How the process works: Dealer • Ensures that £2k scrappage discount appears on customer’s sales invoice • Retains records for audit purposes - V5 of trade-in vehicle • Copy of CoD • Current MOT • Invoice showing discount

14. How the process works: Manufacturer • Key role in scheme administration • Educate dealer network • Promotes scheme through own advertising • Ensures timely supply of vehicles • Manufacturer submits weekly return to BERR listing orders under scrappage scheme from dealers and proposed delivery dates

15. How the process works: Manufacturer • Following completion of transaction, manufacturer submits payment claim to BERR (on bi-monthly basis) • Following payment by BERR, manufacturer reimburses dealer within 10 working days • Manufacturers to notify BERR of orders on daily basis when they receive notice that scheme funding is running down

16. How the process works: BERR • On receipt of order notifications from manufacturers BERR - updates payment forecasts - checks CoDs • On receipt of payment claim, BERR checks details against returns already logged • BERR checks keeper, CoD, & MOT details on DVLA database

17. How the process works: BERR • BERR issues payment to manufacturers within 10 working days of claim submitted and updates expenditure forecasts • BERR will notify manufacturers when funding is running down and cut-off point • Independent audit – after 2 months and at the end of scheme • Carries out scheme monitoring

18. Claim process • Standard claim form & spreadsheet giving details of - consumer - dealer - old vehicle details - new vehicle details - CoD & ATF - MOT date • Claim form signed by Finance Director

19. How the process works: ATFs • collect vehicle from dealer or consumer • submit CoD electronically to DVLA • provide copy of CoD to dealer

20. How the process works: DVLA • DVLA to check CoDs , registered keeper & MOT on database • Service Level Agreement with BERR

22. Next steps • BERR to issue grant offer letter to manufacturers containing terms and conditions