Government Scrappage Scheme

[grober]

This thread is going to raise a lot of hackles I'm sure but I guess someone has to raise it.
Its beginning to look like the UK govt are going to sign off the Scrappage policy in April 2009 (a scheme which has been winging its way around other European countries) in order to kick start the new car sales here.

Obviously there are conditions - your car has to be at least 9 years old and you must trade it in at a dealer for a new (or up to a 1 yr old) vehicle. That's when you can claim your £2000. QUOTE:-

Business Secretary Lord Mandelson is preparing to launch a £2,000 'scrappage' scheme next month in a bid to kick-start UK car sales.

It is understood that talks on the launch of a 'scrappage' scheme, which has been promoted by the motor industry, are at an advanced stage.

It is possible that the launch of the initiative could be contained in the Government's Budget statement on April 22.

Under the plan, owners of cars and vans more than nine years old would be entitled to a £2,000 discount on the purchase of any new or one-year-year-old car or van bought at a dealership.

Owners of the old vehicles would have to deliver them to one of a number of car recycling plants and receive a certificate of 'scrapping'. They would then present this to a dealer and receive the Government-funded £2,000 discount.

This has lots of pros and cons for the owners of older Mercedes especially bigger engined ones.
The environmental argument depends on whether the savings gained by increasing numbers of newer cars on the roads with better emissions outways the considerable carbon footprint involved their manufacture? I remain to be convinced of this.
One advantage is that your old merc "banger" immediately assumes a minimum second hand value of £2,000 provided its roadworthy ie. has a current MOT / is licenced??
However expect the current discounts on new cars to probably disappear immediately this scheme comes in--- it will probably be back to the list price days I fear.

You will notice that the time interval proposed is 9 years which neatly fits with where the tax break on VED currently falls i.e. the only large engined cars with a reasonable VED will soon be pre 2001 at THE MOMENT) But this might change?

The sad fact is that if this comes to pass it will mean the demise of many old Mercedes I fear. If they have to be scrapped in their entirety it may also mean sources of second hand spares may also dry up.

 

[kth286]

Not so sure I agree with all that.

You have an old 124 purchased for £1500.

It will be worth £2000 under the scheme BUT only if you are prepared to spend another say £8000/10000/12000 and all that entails ie. nearly new car
with all the depreciation that modern new cars experience.

There really is no financial gain in my mind after taking that fact alone into
account.

 

[coupe deville]

remember this govt couldn't run a p!ss up in a brewery.
sounds like a lot of paper shuffling that will be open to fraud

 

[stevesey]

One advantage is that your old merc "banger" immediately assumes a minimum second hand value of £2,000 provided its roadworthy ie. has a current MOT / is licenced??

Not strictly true - how many people with cars worth less that £2K upgrade to cars less than 1 year old. Maybe at the bottom end of the market, but not often on a mid->top end car. May end up with some very odd situations.

Also could create some interesting deals - you have a £6K car which you trade with you swap neighbours £500 car before upgrading to a new £20K car - then split any notional profit between you.

Shouldn't affect discounts as the gov't will be stumping up the £2k not the dealers.

 

[st4]

Again, as I said before, the government is interfering in something it neither understands or cares too, nor has the ability to understand due to the intellectually deficient people that make it up.

Its just in the name of being percieved to being green. This, like everything else, that comes out of number 10 (it would be more apt if it was number 2) has not been thought out, lacks basic common sense and is just gesturing.

I, along with others will gesture back @ Gordy Cloon. At the ballot box.

 

[grober]

I'm certainly not saying that the scheme is a good or bad thing but suffice it to say that in Germany new car sales are up by 20% since the scheme was introduced at the beginning of 2009. It would appear owners are voting with their feet?
The pre 2001 VED dispensation may also disappear and how many people are going keep an old car on the road if its going to cost £500+ to licence it?
We all like to think our old mercs are going to last for ever but in the end body rot is going to do for many of them despite the lavish attention of devoted owners. If you are lucky enough to have a bodily sound car then that's fine but if MOT time has become the nail-biting annual ordeal it is for some owners then the idea is not without its attractions.

Mind you this all hypothetical since I doubt the government has any money left after bailing out the banks. I suppose they could always print some more.

 

[andy_k]

this system seems to have worked pretty well in Germany (amongst others) and has to some extent kick started the car market again. An interesting point was that some of the major manufacturers were fighting for the new customers and rather than increasing the base price were in fact matching the government offers with discounts. At one stage, it meant you could pick up Fiat 500s for about £2k and that suddenly looks like a very good deal.

More scaremongering....far from forcing up the value of cheap cars, why would it affect them as long as the 'rules' include a condition that you have to have owned the car (and had it taxed and insured) for at least 6 months? The buying cheap to make a quick profit would have no affect. How many dealers offer a minimum £1000 trade in yet the local papers are still carrying adverts for cars that cost £100.

Would it affect me? No. Would it make me want to buy a new car? Well it depends, if it meant we could trade the Mondeo in for a one year old model for two or three grand then yes, we probably would.

 

[Classic C200]

I thought the Government got their money from the "TAX PAYER". that's us.

So lets get this straight!

The government want to give the taxpayer £2000 of taxpayers money to everyone trading their car in under this scheme.

I can't get my head around this one .........................!

Sorry but is this me, or is something criminally wrong with this scheme?

 

[st4]

So the government now wants to kick start the car market by pouring millions into scrapping cars (which would get good homes with people who can only afford a cheap £500 car) after not being content with pouring millions into failing institutions like RBS.

Hell its only money as its not theirs, but its OUR money and I can't see how it benefits the public if AndyK has a newer mondeo - just using your post as an example

 

[nick mercedes]

Owners of the old vehicles would have to deliver them to one of a number of car recycling plants and receive a certificate of 'scrapping'. They would then present this to a dealer and receive the Government-funded £2,000 discount.

Seems a shame that perfectly roadworthy yet elderly cars will end up getting squashed...

Since there are no UK owned car makers why should tax payers money be used to prop up foreign businesses in trouble?

 

[andy_k]

So the government now wants to kick start the car market by pouring millions into scrapping cars (which would get good homes with people who can only afford a cheap £500 car) after not being content with pouring millions into failing institutions like RBS.

Hell its only money as its not theirs, but its OUR money and I can't see how it benefits the public if AndyK has a newer mondeo - just using your post as an example

but if we (and thousands of others) were to buy a new Mondeo, it would create jobs. People have to assemble these cars, parts have to be manufactured for them, distributors have to move them around the country, mechanics have to service them etc etc etc. These people could then afford to buy other products which has the same knock on affect

It's about getting money moving again.

Talking of homes....those of us with slightly longer memories will recall that this country used to have massive amounts of low cost 'social housing' which meant people could afford to keep a roof over their heads. These houses were built with tax payers money. What happened to them? Oh yes, the Tories sold them all off

It doesn't matter who you vote for, they will take your money and spend it how they want

 

[andy_k]

Seems a shame that perfectly roadworthy yet elderly cars will end up getting squashed...

Since there are no UK owned car makers why should tax payers money be used to prop up foreign businesses in trouble?

they do anyway when costly electrical components fail or they become more expensive to maintain than their perceived value - the current prices of second hand luxury barges suggest many of them are one step away from the scrap yard

Agreed, there are very few UK owned car makers the foreign businesses employ thousands of Brits in what are often very depressed areas - surely these are the people that will benefit in the short term.

In the long term we all benefit because the 'feel good factor' returns

 

[nick mercedes]

they do anyway when costly electrical components fail or they become more expensive to maintain than their perceived value - the current prices of second hand luxury barges suggest many of them are one step away from the scrap yard

Agreed, there are very few UK owned car makers the foreign businesses employ thousands of Brits in what are often very depressed areas - surely these are the people that will benefit in the short term.

In the long term we all benefit because the 'feel good factor' returns

What UK car plants are actually under threat though?

The Japanese one are too modern and productive to close down, Ford only make engines here now, supposedly Elesmere Port is safe due to being the lead plant for the new Astra, who does that leave?

It's the lack of finance that's the problem, you can get £2k knocked off the price of almost anything as it is.

But due to the great british public being skint and having to be (in the main) financed for anything over £5k the scrappage thing will not do a fat lot...

 

[st4]

but if we (and thousands of others) were to buy a new Mondeo, it would create jobs. People have to assemble these cars, parts have to be manufactured for them, distributors have to move them around the country, mechanics have to service them etc etc etc. These people could then afford to buy other products which has the same knock on affect

What and the car thats being scrapped suddenly doesn't need serviced, parts made up for them and distributed.

The bits in bold apply but the hold true for manufacturing spare parts and all the things that go with older cars. A throw away culture isn't what you want. Look at the USA as an example of such.

It's about getting money moving again.

What you really mean is borrowing more and more and digging ourselves deeper into the hole we are already in.

The sort of person that has a 9yr old car thats worth £2k or less tends to be of a lower income. So they get £2k for it, £1500 more than selling their shed on eBay. Great, but the new model they need for this grant costs approx £10k. They'll need to finance the new purchase and then what happens if they no longer can afford to pay back the loan. Then we are back where we started, with "toxic debt". It really is a bad idea.

Talking of homes....those of us with slightly longer memories will recall that this country used to have massive amounts of low cost 'social housing' which meant people could afford to keep a roof over their heads. These houses were built with tax payers money. What happened to them? Oh yes, the Tories sold them all off

And your point is, more people now own their home. And thats a bad idea because....

It doesn't matter who you vote for, they will take your money and spend it how they want

True, but how someone else may want to spend MY money may be better than how someone else may want to spend it.

 

[andy_k]

ooh loads of sweeping generalisations there

why because someone drives an older car is it assumed that they are on a lower income?

it's not just lower incomes that created 'toxic debts'

Selling the council houses off was a catastrophe for the housing market, telling everyone they could now afford their own home and that the money would be readily available was what started the downward spiral we are now seeing the effects of - after all it was designed to get people on lower incomes to borrow large amounts of money using not only tax payer's money but their assets as well as an incentive - I'm not seeing a great deal of difference here are you? Only the amounts borrowed and the terms of the loans vary


It's not just your money, it's everybody's money and because as a country we voted for them they have a mandate to spend it how they see fit

 

[andy_k]

remember, according to joe public no govt could run a p!ss up in a brewery.
sounds like a lot of paper shuffling that will be open to fraud

fixed that for you

 

[st4]

ooh loads of sweeping generalisations there

why because someone drives an older car is it assumed that they are on a lower income?

An older car worth less than £2k is more likely to be driven by someone on a lower income just like a brand spanking £100k S class isn't. Most (not all) people have possessions that are representative of their wealth/disposable income....

Certain older cars are owned by enthusiasts, but I can assume that the majority of 15yr old Euroboxes (Astras, Peugots, Mondeos) are driven by people that cannot afford a newer car, othewise they'd go out and buy one. Just like I have an E220cdi, if I had more money I'd have an S600. Its a simple concept really.

it's not just lower incomes that created 'toxic debts'

You got me there, it was all the high earning bankers that lent out the money who did...

Selling the council houses off was a catastrophe for the housing market, telling everyone they could now afford their own home and that the money would be readily available was what started the downward spiral we are now seeing the effects of - after all it was designed to get people on lower incomes to borrow large amounts of money using not only tax payer's money but their assets as well as an incentive - I'm not seeing a great deal of difference here are you? Only the amounts borrowed and the terms of the loans vary

So either we cannot learn from our mistakes if what you say is right. Giving a wee grant of tax payers money to buy a low CO2 french snotbox isn't much different then...

I thought the real problem was lending money but not having adequate collateral. Nothern Rocks 120% mortgage just springs to mind here....

It's not just your money, it's everybody's money and because as a country we voted for them they have a mandate to spend it how they see fit

Thank christ it ain't all my cash, I'd go nuts if it were

We voted them in, but if we could see into the future do you think the nation would have. Actually it probably would given its intellectual make up

 

[ringway]

OK, £2000 scrap trade in for Gordon Brown.

Buy nearly new Nissan Micra to run the country - Job's a goodun

 

[Dryce]

but if we (and thousands of others) were to buy a new Mondeo, it would create jobs.

It will divert our money to a part of the economy which is sick and perhaps will never recover to its previous position.

Talking of homes....those of us with slightly longer memories will recall that this country used to have massive amounts of low cost 'social housing' which meant people could afford to keep a roof over their heads. These houses were built with tax payers money. What happened to them? Oh yes, the Tories sold them all off

I remember this social housing before the sell of. It cost the taxpayer a whole pile of money. It wasn't properly means tested. And the maintenance/improvement was a nice gravy train for some contractors.

I don't particularly agree with the extent of the sell off. But it was no panacea.

The solution was to get rid of some of it and properly means the rest it - forcing people to move if their situation changed. But no government would be willing to do that.

 

[MarkF]

Where does it say that you have to scrap your car? Mine is 9 years old in december 2010 and if I have not changed to the new shape there is no way I will be scrapping mine, not for any amount of discount, I could get way more that that for cash.