Handouts up to 4,000 euros for new cars as part of green government scheme

Car dealers must contribute.
Car dealers must contribute. / EFE
  • The vehicle replacement stimulus package targets cars over ten years old and includes diesel and petrol models but larger subsidies are available for electric cars

The Cabinet has given the go-ahead to a huge scheme of incentives to encourage people to scrap cars over ten years old.

To take advantage of the government's new vehicle replacement stimulus package, a purchaser (private individual or self-employed) can consider new cars up to 35,000 euros (45,000 for those with reduced mobility or those buying purely electric cars).

The scheme includes traditional diesel and petrol models as well as more advanced technologies. Carbon emissions on the new purchase however will need to be below 120 g CO2/km.

Starting from this week, there is an 800-euro subsidy for a petrol or diesel model if its energy class is A and 400 if it is B-rated.

Hybrids ('Ecos') qualify for 1,000 (A) and 600 euros (B) and fully electrics (Cero) receive a 4,000-euro subsidy.

The rules say that car makers and dealers need to match the discounts (up to 1,000 euros), so a 800-euro government handout becomes a 1,600 euro saving to the purchaser, for example.

An extra 500 euros will be given for vehicles over 20 years old, to people with reduced mobility and households on income under 1,500 a month.

Separate reductions apply for small and larger companies, although these are for smaller amounts.

Money will also go to help local authorities and governments renew their fleets.