MPs Look To Extend Life Of Car Scrappage Scheme   no comments

Posted at 6:36 pm in Uncategorized

Back in May, the Government launched a scheme that would reward car buyers when they scrappage their old bangers. Oddly enough it was called the ‘Car Scrappage Scheme’ and it gave car buyers 2000 towards a new car when they scrapped a car that’s more than 10 years old.

600 million pounds was the total price to run the scheme. Half of which was payed by tax payers and the other half was payed by the car manufacturers. Although this is alot of money to invest in the scheme, it appears it’s paying off for the industry??

The total number of registered cars for July 2009 were released last week and it seems to have risen by 2.4% compared to the same month last year. A total of 157,149 cars were registered last month, making it a 2.4% rise on the same time last year. Out of those 157,000 odd cars, around 33,000 of them were bought as part of the scrappage scheme. The last sales rise seen was back in April 2008, so although 2.4% is not a huge number, it’s still a number to be happy about.

Due to the good result that’s occured from the scheme, many MPs are calling for Lord Mandelson to continue the scheme for 2010. Currently the scheme is due to end in February, or when the 300 million of tax payers money runs out. However, as it has proved so popular with over 144,000 cars registered with the scheme since it’s start back in May, I wouldn’t be shocked if it was continued.

Car retailers will be hoping that if the scheme is kept going, the amount of cars being registered will continue to rise.

Even though the scheme has proved to be good for the new car market, it’s not so good for other parts of the industry. The first one affected is the second hand car market. As everyone is scrapping their old cars, many people are finding it hard to find a suitable second hand car. The other problem occurs in the cheap car leasing market.

Due to the high number of new cars being registered, the leasing sector is loosing out because people are opting for a new car rather than a Nissan lease when they can just scrap their older car for savings off a new one. Fortunately, this problem isn’t also passed onto the van contract hire sector which doesn’t yet benefit from the scrappage scheme.

Written by ydpaar on August 23rd, 2009

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