On 21st March 1938 a formal statement was issued by Cunard, announcing that Berengaria was to be permanently withdrawn from service and placing her up for sale. No serious offers were received, because everyone was aware of the expense of the rebuild, to enable her to regain the necessary certification for passenger-carrying.

Berengaria had suffered a number of fires, many in her later years as the insulation on the wiring broke down. A major fire had broken out on 3rd March 1938, while she was docked in New York, resulting in serious damage to many areas – even some deck plates were buckled. Following an inspection by the US Steamboat Inspection Service, her certificate of seaworthiness for US passengers was revoked. Berengaria sailed for Southampton on 4th March, empty of all passengers, many of whom had been transferred to Queen Mary, along with most of the stewards.

Once in Southampton repairs were started, but after another fire on 16th March Cunard accepted that Berengaria was not worth the cost of the necessary repairs and rebuild. Berengaria was towed to Berth 108 in Southampton’s Western Docks and laid up, awaiting a decision. No interest was shown in purchasing her, as all the other companies were aware of the state of the wiring and the costs that would be involved in refitting such an old vessel. On 19th October, it was publicly announced that she was to be sold for scrap. Berengaria finally sailed from Southampton on 6th December, heading for Jarrow on the Tyne.