Car Scrappage Scheme - Darling wastes the chance

Darling wastes an opportunity with a half-hearted car scrappage scheme

The Car Scrappage Scheme had problems as a concept. But it was a way to help shift more cars (but without a change in underwriting policy it’s debatable how many would sell). And at £2,000 a go it was a reasonable incentive to buy.

But even as originally proposed we had our doubts. Firstly, how many people driving ten year old cars would be in a position to buy a new car, even with a £2,000 incentive? Would those people be able to get finance? Would it apply to all cars? Well, we’ve got our answers, but they are a real let-down.

Not only is the Government offering £1,000 not giving away £2,000, they’re expecting the car makers to chip in the £1,000 they’re offering by putting up the same. Which makes a nonsense of the scheme. If you can’t already get £1,000 off a new car then you’re doing something seriously wrong. So car makers won’t actually be stumping anything up. In fact, they will probably insist on list price for cars bought under the scrappage schemes, so they’ll probably end up getting more for the car than they would have done without the scheme.

Bit like the VAT fiasco. What use is an extra 2.5% off when retailers were already slashing prices by 20% + to make a sale? All that happens is that we, the taxpayers, throw money down the tube.

Complete waste of time. A bit like the Government. If only they were as good at economics as they are at claiming expenses, we’d all be in clover now.

The Car Scrappage Scheme Details

In his Budget statement to the House of Commons on 22 April 2009, Chancellor of the Exchequer Alistair Darling confirmed that a scrappage incentive scheme will be introduced.
A total of £2,000 will be offered in a “cash-for-scrap” scheme for 10-year-old, or older, cars.
The £2,000 saving will be made up of £1,000 from the government and £1,000 from the relevant car manufacturer.
Participation in the scrappage scheme by specific car manufacturers is voluntary.
The funding will be made up of £300million from the government – a figure that will be matched by manufacturers participating in the scheme.
The scheme is expected to be introduced in mid-May.
The scheme will run until the start of March 2010, or until all of the government funding has been used.
The discount will be offered to consumers buying a new vehicle to replace a vehicle which they have owned for more than twelve months.
The registered keeper must have a UK address.
Eligible vehicles must have been first registered in the UK on or before 31 July 1999 and have a current MOT test certificate.
Scrappage savings apply to commercial vans (up to 3.5 tonnes) as well as cars.
The scheme will be audited by the DVLA.
Scrappage trade-ins can only be made against new cars.