It’s Scrap! Scrapping Scheme, scrappage and car trade in for scrap subsidy and bonus. Budget, Darling and Motor Industry car dealers.
Posted on | April 23, 2009 | Comments Off
It’s Scrap!
Ling Valentine, the Gateshead-based car leasing entrepreneur says the Government Car Scrappage Scheme launched in the Budget is useless.
The scheme will see the Government offer a £1,000 incentive (up to a total of £300 million across the scheme) to be matched by participating vehicle manufacturers when scrapping a taxed, insured and MoT’d car or van up to 3.5 tonnes over 10 years old which they have owned for at least one year.
The registered keeper must have a UK address to take part in the scheme. The dealers will do all the paperwork for motorists participating in the scheme and arrange for the old vehicle to be scrapped.
However, Ling Valentine says there are many downsides to this scheme;
“First, I don’t see the need for a scheme anyway. All this does is confuse consumers with the promise of bribes which don’t exist.
“The Scrapping Scheme has shot the car manufacturers and dealers in the foot by needing a matching £1,000 contribution from them. Consequently we are seeing them squirelling out of the scheme. For example, Toyota are only applying it to their mid-range Auris car, ignoring the much greener Yaris, Aygo and IQ microcar.
Car dealers are also wondering how much it will cost to scrap the old cars that are traded in. And the cash-flow strains of waiting for pay-out from the Government on dozens of scrappage deals could mean some even going bust.
“It’s rare to find someone who owns a 10-year old car who is in the market for a new car. These people are typically not in a position to borrow the balance to change into a new car.”, says Ling.
Some manufacturers are partially signing up to the scheme, and others are putting conditions on it. For example, Volvo are restricting the subsidy to particular finance deals.
Parkers.co.uk says “Buyers who don’t have an older car to trade-in will be much worse off than they were at the end of 2008. Many buyers may find that although they qualify for the £2000 grant, they won’t be able to get the finance they need to buy the car.”
Ling says there are many more questions than answers about the scheme, “For example, who pays the charge to scrap the car at a recycling centre, will customers lose out on the equity in their old car as it should be £2000 PLUS the value of your old car, will it reduce the customer’s opportunity to haggle, will other discounts be reduced at dealers, and where will the dealers or manufacturers recoup their £1,000 contribution from? Surely it will be passed to other buyers, in the form of higher charges.”
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FULL DETAILS ON HOW THE SCHEME WILL OPERATE:
1. The £2000 grant is made up of £1000 from government with matched funding from industry. The scheme will operate from mid-May until March 2010 or until the government funding has been used.
2. It applies to commercial vans (up to 3.5 tonnes) as well as cars that are 10 years old or older.
3. The scheme is a voluntary scheme so not all manufacturers or dealers may participate.
4. How to apply
The dealers will do all the paperwork for motorists participating in the scheme and arrange for the old vehicle to be scrapped. The dealer will check that the vehicle being traded in and the new one being bought qualify under the scheme:-
OLD VEHICLE
Passenger car or small van up to 3.5 tonnes
First registered in United Kingdom on or before 31 July 1999
Currently registered with DVLA to the registered keeper making the application, or currently on Statutory Off Road Notification (SORN)
Current MOT test certificate
Registered Keeper must have a UK address
The registered keeper has been the registered keeper of the vehicle continuously for the preceding 12 calendar months before the order date of the new vehicle
NEW VEHICLE
Passenger car or small van up to 3.5 tonnes
First registered in the UK or after the date the scrappage scheme is launched and declared new at first registration in the UK with no former keepers
UK specification vehicle
Registered to the same registered keeper as the registered keeper of the eligible vehicle to be scrapped
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Ling Valentine has called on Paul Everitt, Chief Executive of the SMMT (Society of Motor Manufacturers and Traders) to resign, as she claims “This man has caused the car market to freeze in 2009, as buyers with sense have held off making decisions. Now this scrappage scheme has arrived, it seems next to useless. The motor industry is culpable and Everitt should go.”
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