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Germany tinkers with junk car scheme rules to fight fraud

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Germany tinkers with junk car scheme rules to fight fraud
Photo: DPA
14:55 CET+01:00
German officials have changed the rules for the popular new auto “scrap premium,” or Abwrackprämie, because of fraud, an Economy Ministry spokesperson told The Local on Wednesday.

The successful new scheme, also called the “environmental bonus,” offers Germans €2,500 to junk their old car and buy a new one – but some people are trying to get the bonus and a cheaper new car without actually scrapping their old car.

“There are no numbers for how many people are causing this problem,” a ministry spokesperson told The Local. “It was probably isolated cases, but the parliamentary budgetary committee recommended the change to guard against further abuse. People who want to act like criminals always find a way.”

The new rule means that those applying for the €2,500 towards a new car must provide the original vehicle registration for the scrapped car instead of just a photocopy. The Federal Office of Economics and Export Control (BAFA), which processes the applications on behalf of the Economy Ministry, will then destroy the registration.

“This will prevent the environmental bonus from being taken while the old car ends up getting sold,” a statement from the Federal Press Office said on Wednesday.

The €1.5-billion Abwrackprämie programme has been in effect since February 20 as part of the government's second economic stimulus plan. It was designed to encourage used-car buyers to add their old cars to the scrap heap for new, cleaner-burning autos.

The government's hope that the subsidy would stem a decline in new car sales and thereby support one of the country's most important industries seems to have worked. This week auto sector federation VDA reported that February car sales were up 22 percent from the same month in 2008.

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