Car Scrappage just announced [MERGED]

Ling_Valentine

Dealers do not contribute to the scheme (although they may have some cashflow costs). The scheme will be run by automotive manufacturers who wish to participate. Dealers will be the point of contact at which customers will be dealt with, but the financial contribution is from manufacturers and taxpayer.

The dealer does not need to "find" any money. Dealers are not choosing whether to participate, it is manufacturers who are making that choice.

They do not have to participate. They have a clear choice.

What I object to is that they choose to participate, but do not bring their side of the subsidy to the deal, yet expect the taxpayer to contribute.

BillScarab

When the leader of the Green Party was interviewed ont eh Today program she condemned the schemes fake environmental credentials. It threw the interviewer as they were expecting her to be in favour of it.

Lemonade_Pockets

Ling i generally agree with what you stand for and i like your business model, and for that i had you down as a intelligent woman.

However your post above is complete tripe, i'm not sure if you really hold that view or if it is another shock tatic publicity stunt.

I think some figures will illustrate my point better, so i have used figures Q1 figures from two European MFR's that are "embessling" our money:

Audi . Pre tax profit: €363 million. Sales 262,000. Operating profit per unit €1385.50. Not all of that money will have been made directly on car sales either.

Ford of Europe. Q1 loss of $550 million. Sales 343,000. Profit per unit -$1603.50

So our goverment has introduced a scrappage incentive to help out the car industry in this country + to a certain extent Europe, we are in the EU after all so lets not get all protectionist about it. In its infinite wisdom it has decided that MFR's should contribute a £1000 too.
Now would someone care to explain to me how MFR's contributing a £1000 in addition to what they are already offering as discount is going to benefit them.
Very simplistically this would mean Ford would lose $2600 a car and Audi one of the healthiest MFR's would now probably make a loss after tax. How is that helping them????

So it patently obvious most MFR's will adjust marketing programmes to cater for this £1000 they now have to give towards the scheme. I think describing it as imbezzlement is a bit far fetched. More like protecting their already slim balance sheets from a Goverment scheme that was supposed to help them out.

Or is this sour grapes because you think MFR's are going to start decreasing Fleet rates to help pay for this??

sillygoose

Its also a prejudice system. It might (only might) be of any worth at the very bottom of the market with the cheapest of cars where it may trigger a bigger discount than would be available on a £6000 car.

All good and fine if you can all fit in a Panda with a weeks shopping! For the family that currently goes around in the 10 year old smoke belching Mondeo because they need a car that size, this 'discount' is hardly likely to bring a new £16K Mondeo into their price range. Its of no consequence.

Tough luck if you have 2 or more kids and a dog!

AdrianHi

Armengar wrote: »

The irony was, I was considering a second hand zafira but on the balance I estimate an SMax would retain its value and depeciate at the same rate as a second hand 3 year zafira! (based on my second hand searches of motorpoint etc) The zafira was circa 160g/km too therefore evidence on scrappage helping me ignore the second hand market...

I've done these sorts of sums on various cars myself and found the same thing. Cut off the early depreciation and it's doesn't make much/any difference if you buy nearly new or 3 years old.
Some people cannot be convinced of this fact.
The factor in younger car still under warranty, possibly better on fuel, no MOT... now how are the figures looking?
Diesel is not meaning cheaper either now especially since these newer diesels have more potential for expensive problems later in life and some (Mazda an example) carry a service at around 70K miles costing £550 more than the equivalent service for the petrol taking away fuel savings.

Also there are signs in the market that diesel cars are now slipping in value used to match petrols as people are buying up petrols again in gerater numbers.

Ling_Valentine

Lemonade, well the manufacturers can opt to join the scheme and enjoy the additional taxpayer £1000 subsidy to increase volume (and contribute £1000 themselves) or they can opt to NOT join the scheme, and not have to contribute £1000.

What I object to is that they want to use the £1000 taxpayer subsidy while maintaining the current status quo on their own discounts.

I have no axe to grind or sour grapes apart from thinking that the scheme is fairly useless and will not work. Despite the fact that the industry has been calling for it. As it has no effect on any fleet discounts, I can't say that there is any effect on my business - which fleet has 10-year old cars to trade in? My personal customers are significantly high credit rating, very few of these people have a 10 year old PX.

AdrianHi

Ling,
I'm curious to know how this £2000 scrappage scheme works in relation to moving to a lease car?
Is it possible to get a better lease deal factoring in the £2000 scrap value of an older car?

Lemonade_Pockets

What I object to is that they want to use the £1000 taxpayer subsidy while maintaining the current status quo on their own discounts.

Of course they do, otherwise it would be soley helping the consumer rather than the industry.

If the government wanted to help out the consumer why not just give us all £1000 direct for scrapping cars????

I can't understand why people are surprised about this. Again i guess i underestimated our governments ability to cause mass confusion by dressing up a subsidy as something its not.

The net benefit should be £1000 to the consumer maybe a little more if you are lucky.
*assuming you have a qualifying car to px that is worth £0.

I would like to know who is getting the scrap value for these cars though. Or is the scrap industry the secret winners?

Armengar

"Scrappage Scheme Allowance
From mid May 2009, vehicles first registered on or prior to 31 July 1999 will be eligible for a £2,000 Ford/Government Scrappage Allowance when the owner purchases a new Ford vehicle at a participating Ford Authorised Dealer"

Taken from Ford. Ford will endorse the scrappage scheme from a 'participating' dealership. The dealerships do not have to take scrappage into account even though the parent company is accepting the purchases and will process the paperwork. Dealerships are companies (or techincally franchises) that purchase vehicles from a manufacturer. Not all dealerships pay the same for the vehicle from the manufacturer, it depends on sales volumes.

The scrappage scheme was ALWAYS between the manufacturers and the government, however, the list prices remain the same hence a dealership will effectively lose the £1000 negotiated in the scrappage prices as they will be purchasing the vehicles for the same price.

Ford (per se) will not lose money, they will gain money if more people buy. The dealerships will lose money as they will be haggled down or be forced to cut margins. Maybe the large fleet purchasers will be able to honor an extra £1000 drop but unlikely.

RE: AdrianHi scrappage cannot be used in contract hire as the car needs to be registered *1st* to the same person as the car to be scrapped.

Ling_Valentine

Lemonade, well my maths must be wrong then.

A £2000 scrappage scheme should mean a £2000 benefit for the person buying the new car and PXing a qualifying older car.

How does a £2000 scheme equate to a £1000 benefit? Where does the extra £1000 go? That is the question.

I would be very interested what happens when you have negotiated a deal on a new car, and at the conclusion, you announce you have a car to be scrapped. Does the dealer only give you £1000 off, or do they swiftly wind back £1000 of discount then give you £2000 off? That would be a trading standard issue. If they did that on an HP or finance offer, they would be breaking the law.

In either case the consumer, and the taxpayer, is misled.

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AdrianHi, no, there will be no scrappage possible on a lease car.