ULEZ: How to make the most of the £2,000 scrappage scheme

Grants of up to £2,000 are now available to all Londoners who want to scrap any car or motorcycle that is non-compliant with the Ultra Low Emission Zone (ULEZ). We explain how it works and how to apply

scrap metal yard
(Image credit: Getty Images)

The capital is preparing for the expansion of the Ultra Low Emission Zone (ULEZ) to all 32 London boroughs from today (29 August).

Anyone driving in London, whose vehicle does not meet the ULEZ emissions standards and is not exempt, will have to pay a £12.50 daily charge to drive within the zone.

The zone currently covers all areas within the North and South Circular Roads. It operates every day, 24/7, except Christmas Day. 

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The expansion of the zone has been controversial, with many motorists with non-compliant cars, as well as small business owners that need to drive into the capital, complaining about the hefty fee, especially during a time of squeezed budgets and high inflation.

According to a survey by Credit Karma, two in five of London’s car owners will be forced to change or give up their current car under the new ULEZ expansion. More than a third will buy a new car sooner than planned to avoid the £12.50 daily charge, which could amount to more than £4,500 a year.

To help with the cost of buying a new vehicle that is compliant, Sadiq Khan, the London mayor, has announced a £2,000 scrappage scheme.

We explain how it works, who is eligible and how to apply.

What is the ULEZ scrappage scheme?

The scrappage scheme offers motorists with older, less environmentally-friendly vehicles that don't meet the scheme's standards the chance to get cash for their cars.

Vehicles that automatically comply with the ULEZ clean-air regulations are petrol cars and vans registered after 2006, diesel cars and vans registered after 2015, motorcycles registered after 2007, and all electric cars. You can check to see if your vehicle meets the standards on the Transport for London (TFL) website.

Drivers can get up to £2,000 to scrap their non-compliant cars. For a motorbike, the maximum is £1,000. 

The grant for scrapping a non-compliant wheelchair-accessible vehicle is £10,000, or to retrofit a non-compliant one, the payment is £6,000. These payments were previously £5,000 each, but were recently increased.

There is also a separate van and minibus scrappage scheme, with grant options of between £6,000 and £11,500. 

Am I eligible for the ULEZ scrappage scheme?

Anyone living in a London borough, or in the City of London, with a car or motorcycle that is not ULEZ-compliant, is eligible for the scrappage scheme.

It was previously only available to Londoners receiving child benefit, and/or certain means-tested benefits like pension credit and carer’s allowance, but on 21 August, the requirement for receiving benefits was removed.

In order to fund the expansion to all Londoners, the mayor plans to use £50 million of City Hall's reserves. This takes the total bill for the scrappage fund from £110 million to £160 million.

The scheme is available on a first-come, first-served basis, with low-income and disabled Londoners having already had seven months to apply.

To be eligible for a grant payment to scrap or retrofit a vehicle, the vehicle needs to have been registered with the Driver and Vehicle Licensing Agency (DVLA) to you - or someone who lives at your address - since 30 January 2022 or earlier. The vehicle must also have valid insurance, road tax and MOT. 

What are the different grant payment options?

For cars, motorcycles and wheelchair-accessible cars or vans there are eight grant payment options, offering a combination of cash and annual passes for public transport:

  • Scrap a car - £2,000
  • Scrap a car - £1,600 plus one adult-rate annual bus & tram pass
  • Scrap a car - £1,200 plus two adult-rate annual bus & tram passes
  • Scrap a motorcycle - £1,000
  • Scrap a motorcycle - £600 plus one adult-rate annual bus & tram pass
  • Scrap a motorcycle - £200 plus two adult-rate annual bus & tram passes
  • Scrap a wheelchair-accessible vehicle (car or van) - £10,000
  • Retrofit a wheelchair-accessible vehicle (van only) - £6,000

According to TFL, the options that include one or two annual bus and tram passes have a higher total value than the grant payment alone. For example, the option to scrap a car and receive one annual pass and a lower payment is worth over £2,500. The option to scrap a car and receive two annual passes and a £1,200 payment is worth over £3,000.

The annual passes are issued on Oyster cards; a single pass is issued to the grant applicant, and a second can be issued to someone they live with.

The pass is non-transferable and non-refundable and gives the holder 12 months of unlimited travel on TFL buses and trams throughout London.

How to apply for the ULEZ scrappage scheme

Eligible motorists can apply for the scheme on the TFL website. You will need to have (or create) a London road user charging (RUC) account.

Check you have all the required documents - including evidence your vehicle qualifies for the scheme - before you start. The application process needs to be completed in one go as it will time out if it is inactive for 30 minutes.

Note that applications can only currently be made by those fulfilling the criteria of receiving certain benefits. The expansion of the scheme to all Londoners with an eligible vehicle will occur on 21 August.

Make a note of the reference number that appears on the screen when you submit the application in case you need to contact TFL about it.

TFL aims to process applications within 10 working days; it will contact you by email to let you know if it has been approved.

The next step is to scrap the vehicle at an Authorised Treatment Facility (ATF), which will issue a certificate of destruction. Motorists may also receive a separate, additional payment from the ATF for the vehicle’s scrap value.

The vehicle must be scrapped and evidence sent to TFL within one month. The grant payment is then sent as a cheque in the post. The bus and tram passes will also be sent by post. 

What are the ULEZ discounts and exemptions?

Some people qualify for a temporary 100% discount from the ULEZ charge, while others are completely exempt.

This is in addition to vehicles that are exempt because they meet the emissions standards.

Here’s a list of drivers and vehicles that qualify for a discount or exemption

  • “Disabled” and “disabled passenger vehicle” tax class grace period (disabled people whose vehicles are registered with the DVLA as having “disabled” or “disabled passenger vehicle” tax class benefit from a grace period that exempts them from paying the ULEZ charge until 24 October 2027. Disabled people over state pension age whose vehicle does not have this tax class can apply for the grace period if they are in receipt of attendance allowance and hold a Blue Badge.)
  • Wheelchair accessible vehicles grace period (the vehicle needs to be fitted with one of the following adaptations: a permanently fitted foldable ramp or a powered lift allowing the wheelchair user to enter the vehicle, an electric or hydraulic hoist to lift a person or wheelchair into the vehicle, a swivel seat on either the passenger or driver side of the vehicle, an accelerator ring permanently fitted to the steering wheel of the vehicle. The grace period runs until 25 October 2027 and must be applied for.)
  • Disabled benefits grace period (applicants must receive certain benefits, such as the standard or enhanced mobility rate of Personal Independence Payment, or the higher mobility rate of Disability Living Allowance; or they must meet certain criteria such as having a terminal illness, which means you cannot walk or find walking very difficult, or be registered blind. Again, the grace period runs until 25 October 2027 and must be applied for.)
  • NHS patient reimbursement (if you are clinically assessed as too ill to travel to an appointment on public transport, you may be eligible to claim back any ULEZ charge you paid from your hospital.)
  • Business and charity short-term grace period (this grace period is open to small businesses with under 50 employees, micro-businesses with up to 10 employees, charities and sole traders with a registered address in one of the 32 London boroughs or the City of London, who have either: ordered a newly manufactured light van or minibus that meets the ULEZ emissions standards or booked their light van or minibus, that does not meet the emissions standards, to be retrofitted to meet the standards. The grace period is open until 29 November 2023 for retrofits and 29 February 2024 for new vehicles.)
  • Minibuses used for community transport (many not-for-profit organisations that operate minibuses used for community transport can register for a temporary 100% discount until 26 October 2025. These are minibuses that carry passengers on a not-for-profit basis, such as for educational, religious and social welfare reasons.)
  • Taxis (London-licensed taxis are exempt from ULEZ charges. Older, more polluting taxis are subject to a 12-year age limit, with newer, cleaner taxis extended to 15 years.)
  • Wheelchair-accessible private hire vehicles (these will be granted a grace period until 24 October 2027, during which they will be exempt from the ULEZ daily charge.)
  • Historic vehicles (all vehicles that were built more than 40 years ago and have a historic vehicle tax class are exempt from the ULEZ. This excludes any vehicle used commercially, like coffee vans or street food vans.)
  • Specialist agricultural vehicles (these are exempt from the ULEZ charge.)
  • Military vehicles (these are exempt from the ULEZ charge.)
  • Non-road-going vehicles that are allowed to drive on the highway (for example, excavators. These are exempt from the ULEZ charge.)
  • Certain types of mobile cranes (these are exempt from the ULEZ charge.)

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Ruth Emery
Contributing editor

Ruth is passionate about helping people feel more confident about their finances. She was previously editor of Times Money Mentor, and prior to that was deputy Money editor at The Sunday Times. 

A multi-award winning journalist, Ruth started her career on a pensions magazine at the FT Group, and has also worked at Money Observer and Money Advice Service. 

Outside of work, she is a mum to two young children, a magistrate and an NHS volunteer.