Time to take advantage of £5000 Plug-in Grant extended to February 2016

The government recently announced the plug-in grant scheme for plug-in vehicles will be extended until February 2016 for all types of the vehicle. The £5000grant/discount off the price of an electric powered vehicle was scheduled to be reviewed once 50,000 vehicles were sold. However, owing to the expected early milestone completion date of November 2015, the government has rescheduled and extended the grant end date which is applicable to all plug-in vehicles that emit CO2 emissions of 75g/km or less. This is great news for motorists looking to capitalise on lower running costs and could even lead to lower car insurance costs for electric vehicles.

Transport Minister Andrew Jones was pleased to announce the extension of the grant even after sales of electric powered vehicles surpassed 50,000 vehicles. He further added that the UK hails as the fastest growing market for plug-in vehicles across Europe, and the government plans on making significant investments in an effort to make this technology affordable for everyone, and simultaneously elevate U.K.’s position as a global leader.

With regards to the costs associated with the extension of the plug-in grant until 2016, the government disclosed that a minimum of £200 million has been made available. This is a great perk for fleets as well as private buyers who were contemplating investing in electric vehicles in 2015-2016. Trade body BVRLA (British Vehicle Rental and Leasing Association) chief Gerry Keaney applauds the government’s decision to extend the grant as it not only provides more assurance about the future of this significant incentive, but also offers a nine-month extension for qualifying vehicles to be registered and delivered.

Keaney further said that in light of the surge in interest in electric vehicles, he would urge the government to continue supporting this budding market, and extend the grant beyond February 2016, and even offer additional incentives for those who adopt this technology early. Adding to this, Keaney said the government should opt for a joined-up approach to encourage the sales of ultralow emission vehicles, and also reconsider its recent 2017 planned changes made to the VED (Vehicle Excise Duty) regime.

When the new road tax system takes effect in 2017, low emission vehicles will see a significant rise in VED, while their higher emitting counterparts will get a major tax break, which doesn’t make sense! According to industry experts, the government must continue to offer incentives on ultra low emission vehicles in order to increase sales. Registrations for plug-in grants soared in the first six months of 2015, which is more than 256% than sales at the same time in 2014.

There is now a diverse range of ultralow emission vehicles available in the U.K. from 4×4’s, family hatchbacks to city–run-arounds, with driving costs as little as 2p a mile. With the market being constantly updated with new zero emission technology, motorists in the U.K. will continue to take advantage of the plethora of options available. The government is yet to reveal details on how the extended plug-in grant will be structured after February 2016, which is expected to be disclosed after the Government Spending Review in November 2016.