This entry was posted on Wednesday, August 19th, 2009 at 4:33 am and is filed under cars. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
Car Profiles
Just another Car Blog
Car Scrappage Scheme Has Positive Effect on July Car Sales
Earlier in May, a scheme was launched by the UK government that rewarded new car buyers when they scrapped an old car of theirs. 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.
The cost of the scheme was 600 million. Out of the total pot required to fund the scheme, half was payed by the tax payer, the other half was payed for by the car manufacturers. Even though this is alot of money, it seems to be paying off for the economy.
The total number of new cars registered for July 2009 have just been released and they show a rise of 2.4% compared to July 2008. The 2.4% rise on last year’s figures mean that a total of 157,149 new cars were registered this July. Out of those 157,000 odd cars, around 33,000 of them were bought as part of the scrappage scheme. This rise of 2.4%, although not alot, is actually the first rise in sales seen in the motoring industry since April last year.
Due to the good results the scheme has created, many MPs are looking to extend the scheme for throughout 2010. Currently the scheme is due to end in February, or when the 300 million of tax payers money runs out. However, because the scheme has become so popular with over 144,000 cars registered since it’s start in May, I would imagine they will continue the scheme.
Car manufacturers will hope that if the scheme is continued, the rise in car sales will continue as more people invest in the scheme.
Despite this being good news, there are some downsides to the scrappage scheme. The first would be the second hand market. As everyone is scrapping their old cars, many people are finding it hard to find a suitable second hand car. The second sector that’s affected is the cheap car leasing market.
Because many people are opting to buy a new car rather than lease, many leasing businesses are loosing out as people choose not to go for a Nissan lease when they could just scrap their old car and get more money than it’s worth off a new car. Luckily, this problem doesn’t so much effect the van contract hire sector as the scrappage scheme doesn’t yet include vans.
Leave a Reply