THE GOVERNMENT IS going to offer €5,000 to car owners if they get rid of a vehicle over 13 years old and get an electric vehicle in turn.

The idea here is to encourage drivers to make the switch to electric vehicles ahead of diesel and petrol engine.

Under the scheme, drivers will be offered €5,000 scrappage grant if they get rid of a vehicle over 13 years old and get an electric vehicle.

Climate minister Darragh O’Brien has confirmed that €10 million has been put aside for a pilot, which opens on 1 July.

The €5,000 grant is in addition to the existing €3,500 EV purchase grant run by Sustainable Energy Authority of Ireland (SEAI), which drivers can already avail of.

It will only be available on fully electric vehicles – so no hybrids – and does not apply to second-hand cars.

It means the total support for people switching to an electric vehicle will soon reach up to €8,500 per vehicle.

How much could you save?

So what kind of savings could someone driving a ‘banger’ get if they decide to take up the government on its offer?

A scan of cars for sale on Done Deal with 2012 and 2013 registrations – the most recent years eligible under the scheme – shows a varying price range.

A 2013 Renault Megane is going for €2,950, a Nissan Qashqai from the same year for €4,750.

Cars that are above the €5,000 threshold of the scrappage scheme include options such as a VW Golf 1.6 for €6,000 and a Ford Galaxy for €8,950, both from 2012. Each of those cars is diesel.

All of these cars have significant mileage on the clock, however, which is going to cost you for upkeep of the older car after purchase.

According to The Journal’s motoring columnist Paddy Comyn, that could be where some of the most “significant savings” are made.

Comyn, who also oversees communications for Done Deal, told The Journal that the company’s figures show that running costs for EVs come to around €780 annually, compared to €2,200 for petrol and diesel cars.

“Whatever about the purchase price, I think what will be a consideration for people entering the scheme is that cars this age, even if they’re even if they’re fairly well minded, will still need maintenance,” Comyn said.

“The maintenance can be pretty expensive, and it can start not being economical, so I think there might be an appeal for people who suddenly have to start replacing major components.

“If you have a bill, or you’re facing a bill of a grand or €1,500, it starts hurting a bit more to keep with the older car.”

Motor tax

Another saving, Comyn added, can be found in the annual motor tax. That fee ranges between €180 and €600 for the older cars we looked at above, but EVs are classed in the lowest tax bracket at €120.

Overall, Comyn believes today’s new measure will be enticing for some drivers, especially when combined with the €3,500 discount already available.

He said the EV market has been boosted “new, better value” and more compact vehicles coming on stream as part of a shift away from larger options that have dominated in recent years.

An example can be found in Volkswagen’s new electric Polo, which it announced in April for €19,885. This, like other advertisements for electric vehicles, factors in the existing €3,500 SEAI grant.

Comyn added that this would mean the government’s new announcement would see the price of the new VW Polo reduced to less than €15,000.

“It’s another chunk of change off the price and it’s going to be very significant I think,” Comyn said.

Rising oil prices

Public policy expert Oisín Coghlan pointed to “volatile” oil prices caused by the war in Iran as evidence that the “time to switch is now” for drivers.

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New scrappage scheme will offer €5k for cars over 13 years old if owners go electric

“This also targets people who have had the same car for a long time, not buying a new one every four years, so on average it means you’re likely to support those who need support most with this move.”

Coghlan believes the grants will appeal to many people – but drivers for whom a home charger is not an option are likely to think twice before making the switch.

These include people with no driveway, who cannot install a charger outside their home, or who live in new developments where there may not be many chargers.

Bridging the rural and urban divide

The new scheme will ringfence 65% of the funding, or €6.5 million, for people outside of Dublin, Cork, Galway, Limerick and Waterford. The remaining 35% will be available to drivers within those five cities.

This means there will be money for 2,000 applications when the pilot opens from 1 July.

But this focus on rural drivers is a highlight of the proposals, according to Coghlan.

“We need to move from purely universal grants for EVs that have a tendency to go to people in cities and better-off people, who also have better public transport options,” Coghlan told The Journal.

“Whereas people who are more dependent on cars in rural areas haven’t been getting enough of them.”

As a next step to help people overcome the dreaded ‘range anxiety’, he believes the government needs to be “ensuring as an emergency measure that every motorway service station has at least 6, 8 or 12″ charging spots.

“We need to switch away from fossil fuels as fast as possible,” he said.