SPAIN's Plan VIVE, the details.
Those who follow my column will recognise the name PLAN VIVE as it has been previously reported in this column as well as the previous Plan Prever, the latter system only now just being instigated in the UK with some mixed feelings from the citizens there.
To recap, Plan Prever, which has been replaced in Spain by VIVE, was where a lump sum of cash, just under €500 in Spain, was effectively given by Trafico to buyers of new and semi-new vehicles where the old one was scrapped if it met certain parameters these being mainly high pollution factors and old age.
Plan VIVE has replaced Prever (just as a similar plan is starting in the UK, but with £2.000 at time of writing being offered), so the UK is now belatedly following Germany and Spain with the encouragement not only for pollution reasons but to also get the various car factory production lines moving again. A complaint in the UK has been that many tax-payers especially those who do not own cars have been saying that they object to paying subsidies with their taxes for others to replace their old vehicles, but in Spain this is not that case, for with Plan VIVE, which is based on assistance with the financing of the new or nearly new vehicle purchase, the taxes are raised by charging more to those who buy the higher polluting new vehicles as these do not qualify for any subsidy and, in fact, the taxes have been increased on the higher polluters. This to me is a good idea as it does not arbitrarily ban vehicles with big, powerful engines, merely makes sure that if you wish to buy one, you can if you are prepared to pay. Here in Spain as ever we are encouraged to comply with such new offers, not forced to under pain of heavy fines.
How does Plan VIVE work? The overall intention is to remove the higher polluting vehicles from Spain’s’ roads and the deal must include the scrapping of an old vehicle as described below. Suffice to say that there will be a shortage of so-called “classic” vehicles from the current period in about 25 years time, but as most 25 year old cars were rust buckets and not very exciting, the main attraction being that they can, if in good order, be sold for a good price in future years to someone else who values such memories, and many older drivers relive their youth when they rode around with their parents in such cars. I know that feeling for I have it for old motorcycles such as my old 1950s Vincent-HRD 1.000 cc motos (three of) that I used to ride on the roads and race for fun on tracks in the UK and South Africa in the 1960s to the 1990s often (very often) leaving many frustrated modern bike riders behind. But of course, having raced (Cadwell Park, Kyalami, etc) and used mine a lot even in mid-Winter, I had an advantage over those who only took their bikes out at weekends. I knew what mine could safely really do.
So what is involved in Plan VIVE?
The old car that can be scrapped to qualify;
1. Must be at least 10 years old (see below) or have completed a genuine, checkable 250.000km.
2. Must be Spanish registered.
3. Must be currently owned by the person buying the newer vehicle. So now you know why there are adverts for cheaper, old, any condition cars in the local press. They are to be used for this plan.
The newer car that can be bought using the plan:
- Must be either new or if used, a late model as noted below (e.g. “coche occasion” or 0Km, etc) and have the latest anti-pollution devices fitted such as (if diesel) an exhaust particle filter, commonly referred to as a DPF and this will be to the “Euro 4 standard”: and a catalytic converter if a gasoline engine.
- Have a pollution factor of not more than 120 Gm/Km to 160 Gm/Km. The new vehicle must have certain safety devices described here fitted if more than 120 Gm/Km.
- Sensors in the seats, including the rear ones where if a seat-belt is not being worn a sound is emitted by the car’s warning system. Readers may react in horror at this need but it is a fact that nearly 50% of those killed in car accidents in recent years, including passengers, were not wearing seat belts as required by law.
- Must have an electronic stability device fitted. This is where a sensor that can tell if you have gone out of control while e.g. cornering too fast and tries to bring the car back to a stable state by automatically braking on individual wheels as required as well as backing off the accelerator. This is now a standard extra now on all normal vehicles with a poll-factor of 120 Gm/km plus, by law, to try to reduce further the accident rates on Europe’s roads. But, for expert drivers, it can be switched off. Some even newer vehicles may well not have this fitted at this time as they were, until this year, an option, not a standard fitment as they are now. This effectively is covered also by the rule that vehicles that are to be bought cannot be older than 5 years. Before 5 years some of the required devices were not available on cars then anyway.
- The used vehicle to be bought that qualifies under the scheme must be sold within five years since manufacture or have completed 250.000 Km.
- The scheme only applies to vehicles with a maximum authorised mass or MAM of 3, 5 tonnes. Readers of my book, and knowledgeable others, will know what MAM is.
- If buying a used vehicle, the scrapped vehicle must be older than 15 years. If new, ten years or 250.000 Km total mileage.
What is the VIVE deal?
Plan Prever had a flaw in that most people use bank finance when especially buying a new car so not many people took advantage of it as it involved obtaining finance which at this time with the credit crisis is not easy, but major car dealers have the means and connections. Plan VIVE discounts the finance interest rates as follows:
· The first €10,000 is interest-free for the buyer. The balance up to € €30.000 (i.e. €€20.00 to 30.000) is financed at the Euribor interest rate plus 2, 5%. Euribor (E/R) is short for Euro Interbank Offered Rate. The Euribor rates are based on the average interest rates at which a panel of more than 50 European banks borrow funds from one another and they change regularly according to market demands. See http://www.euribor-rates.eu/ for more information but at present the E/R is under 2% and they are changed daily. The Plan VIVE is not specific about how long the rate lasts but I would assume that it is the rate at the time of sale. A car salesman at a decent dealership can advise you in writing when you look for such a vehicle. As I receive more information I will update all this information on my web-site.
· The maximum finance period is five years.
· The vehicle to be scrapped as the trade-in must be disposed of through a Trafico approved scrap yard (desguaces) within 30 days but the dealer will attend to that for you but you need to be aware so you can obtain the scrapping receipt to avoid any potential future problems as I advise in my book. This is important. TRUST NOBODY.
All in all, it is a good deal, and no doubt the UK will follow if their scheme of a lump sum does not work, but I can forecast much potential fraud with any such schemes.