Car Scrappage just announced [MERGED]

maninthestreet

It does beggar belief that a scheme based on scrapping a perfectly serviceable vehicle in order to buy another vehicle whose construction and usage will result in more C02 being produced, is somehow 'green'??

Indout96

worked out that the petrol is cheaper than the diesel for me to run. So I will be scrapping a car for a more polluting model.

But on the good side you wont be killing your kids with the carcinogens diesel throws out in the atmosphere

AdrianHi

No scappage allowance on a lease car, thought that might be the case.
In some situations may be enough to swing the balance in favour of private purchase if comparing 36 months of "ownership" vs. 36 months of lease/contract hire.

I understand on the continent this scheme has fueled purchases of smaller cheaper Skoda's and VW's (Polo etc), so much so Skoda brought back Saturday shifts.

Lemonade_Pockets

Ling, come on give me a break.

Its not that hard to understand is it. Yes the government have announced a £2000 scrappage scheme. I have no doubt if you order a car it will shown on the order form as £2000 scrappage.

What we are talking about is the net benefit to the customer i.e with scrappage scheme vs before the scheme was announced. As i have illustrated above there is clearly no margin for MFR's to knock another £1000 off their discounted prices. So in reality all the customer will receive as a benefit is £1000. The goverment tried to play it clever by retaining a headline figure of £2000 without the full cost. Its backfired as that was clearly never going to fly.

Armengar thanks for that but you clearly don't understand how it works. Dealers probably on average make less per unit than £1000. If they are being asked to give a extra £1000 of their bottom line by the MFR, then they will ask the MFR to foot the bill by giving them more margin. Either way the MFR would ultimately foot the bill, because if the MFR refused the dealer would just refuse to honour that offer as is their right.

mikey72

Superb scheme.
I trade in a £400 car, that needs an MOT in June, no tax on it, needs a cambelt change, actually costs £125 a year to tax, for £1000.
So I pay either £4995 for the Panda, or £5095 for the i10.
If I could upgrade without the scrappage scheme for the same real cost to me, even selling the car myself, tell me where.
If the car companies actually make a profit, good, they stay in business, and the dealers do, more jobs for eveyone is preferable to benefits.

Armengar

Lemonade, I think we are cross answering- I agree with you and I do understand how it works:

Manufacturer sets a price to the dealership.
Dealership sets a price to the customer.
Manufacturer does not alter price regardless of scrappage.
Dealership negotiates price with customer with scrappage as necessary
ficticious example.

dealer buys car for £14000, sells on forecourt for £18000 previously they had a discount of £2000 on offer. Suddenly with scrappage they cannot realistically add another £1000 that they now need to find for their half of the scrappage - this £1000 will not come from the manufacturer as they will still sell at £14000 scrappage or not. Therefore dealerships will now forecourt the car for £18000 and discount £1000 just in case they need to scrappage a car.

Plus dealerships do not know how long the government £1000 will take to arrive in their pockets after a sale.

Lemonade_Pockets

If I could upgrade without the scrappage scheme for the same real cost to me, even selling the car myself, tell me where.
If the car companies actually make a profit, good, they stay in business, and the dealers do, more jobs for eveyone is preferable to benefits.

Ah someone has grasped the point.

I'm all for haggling as hard as you can, i can assure you i always pay rock bottom for my cars.

But thinking that this Government scheme is going to mean cars get £2000 cheaper is and always has been a ludicrous assumption.
I don't honestly think the Government expected MFR's to do anything other than what they have done. So by fudging the scheme MFR's now have two options loose even more money or look like the bad guys for adjusting discounts :rolleyes:

Lemonade_Pockets

Ok apologies for being a little harsh but just to further your example a little bit:

MFR know's that dealer will now want to keep this buffer, so all their adverts suddenly change to reflect this.

Or to go with what Ling wants: MFR gives dealer additional margin of £1000 where applicable. Dealer retains same margin and everybodies happy. Discount remains the same plus where applicable the happy customers get £2000 for their banger.

Let pretend the second example actually happens as this is what Ling amoung others believes should happen, as anything else would be embezziling tax payers money.
Please can someone explain to me where the MFR finds the additional £1000. Assuming they can't produce it out of thin air please explain how this scrappage scheme has benefited the Industry and or the MFR as all it will have succeded in doing is reducing Margins to far less than 0!

mikey72

There has always been at least two prices for cars.
I've made deals with or without trade in, and also either finance or cash.
So now it's scrappage or not in the mix as well.
I want a good price, without bankrupting the supplier.

Ling_Valentine

The Fiat Panda at £5999 (no scrappage offer) is an invitation to purchase by FIAT.

The scheme is being touted as a £2,000 subsidy to consumers. It is NOT being touted as a £1,000 scheme.

Therefore, if the car is not available at £3999 after scrappage, then I believe the consumer is being misled under the Consumer Protection from Unfair Trading Legislation 2008.

A commercial practice is unfair if it is unacceptable when measured against an objective standard (claiming a £2000 subsidy but it only being £1000 subsidy on the typical transaction value), and it has an effect on the economic behaviour of an average consumer (ie entering into a negotiation over buying a new car after imagining that £2000 subsidy actually meant £2000).