MPs Look To Extend Life Of Car Scrappage Scheme
Tags: car leasing, cars, Nissan, scrappage scheme, vans
Back in May this year, the UK government launched a scheme that would reward car buyers when they scrapped their old cars. 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 to run the scheme cost a total of 600 million pounds. Half of the total was payed by car manufacturers and the other half was handled by the tax payers. Although this seems a large amount, it’s definitely paying off??
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. Overall, 157,149 new cars were registered in July, making a 2.4% on July 2008. Over 33,000 of the total cars registered were bought as part of the government’s scrappage scheme. Even though a 2.4% rise is not a huge number to be happy about, it’s still good news because this rise is the first seen in the motor industry since April 2008.
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 either when the tax payers money input runs out, or in February 2010. 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 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 one affected is the second hand car market. Due to the large number of cars being scrapped, the amount of second hand cars on the market are being reduced. The second sector that’s affected is the cheap car leasing market.
Due to the large number of new cars being bought, the leasing market is missing out because people are choosing not to go for a Nissan lease whereas they could just scrap their old car and get money off a new one. This problem doesn’t so much affect the van contract hire sector which doesn’t yet benefit from the scrappage scheme.