Scrappage scheme 'to be extended'

Lotus-eater

Before when we all rode horses etc...........we didn't all ride horses, iyswim, because we all couldn't afford it, horses cost alot to run as well, they also have the annoying habit of throwing a piston through the block and dropping dead now and again*. That's the problem, too much wealth, you can see it in up and coming economies.

We can't even go back to a feudal system, as manual labour is so undervalued. What we need is a good old black death substitute, then manual labour will be valued again, we also won't have the problems of house values or polluting for a while.

* Mind you, they do reproduce their own replacement.

roddydogs

JasonLVC wrote: »

The government provide a payment of £1,000 to the manufacturer on the proviso the manufacturer matches that level of discount with a further £1,000, thus a £2,000 discount is established at the manufacturers level.

The manufacturer sells the vehicle to the dealer for £2,000 less than the usual price on the proviso, the vehicle is sold to a customer who qualifies under the car scrappage scheme. If they qualify, the customer takes home a car that is technically £2k less than the usual 'list price' - made up of £1k from the manufactuer and £1k from the government, the government contribution is in effect a subsidy to the manufacturer to sell the vehciel cheaper than usual. The customer simply gets his/her car £2k less than they first thought so are happy and not too fussed as to the mechanics of the deal behind the scenes.

Right, so i sell, say loaves of bread, the Government (taxpayer) give me 10p for every one i sell, provided I give 20p off the usual price, how am i "Getting" anything from the "Government" (Taxpayer)? Im actually 10p down on the Deal!

Generali

roddydogs wrote: »

Right, so i sell, say loaves of bread, the Government (taxpayer) give me 10p for every one i sell, provided I give 20p off the usual price, how am i "Getting" anything from the "Government" (Taxpayer)? Im acrually 10p down on the Deal!

You're getting 10 pence a loaf in that case from the taxpayer. You are receiving less for your bread but the subsidy is still real.

JasonLVC

roddydogs wrote: »

Right, so i sell, say loaves of bread, the Government (taxpayer) give me 10p for every one i sell, provided I give 20p off the usual price, how am i "Getting" anything from the "Government" (Taxpayer)? Im actually 10p down on the Deal!

A loaf of bread is not a good example, but if we take it to be a hot doner kebab instead, then when you sell a kebab on a Saturday night, you will sell it 20p cheaper - 10p came from govenrment and you are making a 10p contribution as well (so in reality, you've only discounted by 10p).

When customer buys said kebab (which I am sure is wonderful in taste and appearance), they pay the reduced price....however, the sale of a kebab is subject to VAT @ 15% and so of the money I give to you, 15% of it has to go back to the government - seeing as govenrment gave you 10p and they get 13p back (assuming you sold kebab for £1) then the government are still 'up' by 3p and you have still made a sale, albeit with a slightly reduced margin.

The trick though is that no-one really ever knows what the price of a car actually is - with dealer discounts, trade in values being lower than true value, etc the customer cannot be sure where they stand - they see the £2k off but Ford increased their prices before hand making their cars dearer only to the 'discount' £1k just for you. How sweet of them.

Trust me, no-onin real terms is losing out here other than the customer who lumbers themselves with a three year car loan - but if they wanted the car anyway, then everyone is a winner.

lostinrates

roddydogs wrote: »

Right, so i sell, say loaves of bread, the Government (taxpayer) give me 10p for every one i sell, provided I give 20p off the usual price, how am i "Getting" anything from the "Government" (Taxpayer)? Im actually 10p down on the Deal!

Say nobody is buying bread, your sales are down to a suvival level, or less. Lets say, for example, you make 11p profit on that bread, the rest of the price is costs.. Then a subsidy is arranged, receiving much media time, and the public become aware that bread is better value, and despite only receiving 1 p profit you start making sales again. so then you ar not 10p down, but 1 p up, aren't you? Profit per unit might be down, overall profit is up.

(thi is a flawed anoalogy because for a bread maker there is a more likely chance of winning repeat custom reguarly, but my point is 1 p profit is better than 0 profit.)

lostinrates

JasonLVC wrote: »

A loaf of bread is not a good example, but if we take it to be a hot doner kebab instead, then when you sell a kebab on a Saturday night, you will sell it 20p cheaper - 10p came from govenrment and you are making a 10p contribution as well (so in reality, you've only discounted by 10p).

When customer buys said kebab (which I am sure is wonderful in taste and appearance), they pay the reduced price....however, the sale of a kebab is subject to VAT @ 15% and so of the money I give to you, 15% of it has to go back to the government - seeing as govenrment gave you 10p and they get 13p back (assuming you sold kebab for £1) then the government are still 'up' by 3p and you have still made a sale, albeit with a slightly reduced margin.

The trick though is that no-one really ever knows what the price of a car actually is - with dealer discounts, trade in values being lower than true value, etc the customer cannot be sure where they stand - they see the £2k off but Ford increased their prices before hand making their cars dearer only to the 'discount' £1k just for you. How sweet of them.

Trust me, no-onin real terms is losing out here other than the customer who lumbers themselves with a three year car loan - but if they wanted the car anyway, then everyone is a winner.

OK, thats what I meant but better

roddydogs

lostinrates wrote: »

OK, thats what I meant but better

So why dont they give £1000 off for someone without scrappage? Theyll still be making a "Tiny" profit.

subarusty

roddydogs wrote: »

So why dont they give £1000 off for someone without scrappage? Theyll still be making a "Tiny" profit.

They do give discounts without scrappage. Almost all car dealers will give you something off the RRP. The only time they don't is if the car is a top seller and then they won't give discount as there is no need.

Look around at parkers, what car etc. Target prices are rarely RRP.

Sapphire

JasonLVC wrote: »

Considering cars cost a huge amount of money (£10K upwards), cost a huge amount to run per year (fuel, insurance, taxes, repairs) and also depreciate quicker than you can blink.....how strange that so many sane and reasonable people would buy cars on a whim when they "don't need them".....we can only conclude therefore that people buy cars and drive cars because they do NEED a car.

A large number of people who live in cities do not 'NEED' a car – in particular, families do not need more than one car. Many people buy cars as status symbols to impress others, not because they 'NEED' a car.

The car pollution in London is terrible. Having just returned from a place where there is very little car traffic, I can really feel the bad air clogging up my breathing. Apart from the pollution, it is obvious that the streets are far too crowded with car traffic, mostly with just one person to a large vehicle.

I've lived all over London and have never felt the need for a car.

Arcaine

Apologies if this has already been said but I lose interest in reading a thread when the “he said/she said” arguments start. The scappage scheme has been hailed as a success by some, not by me. The car industry and the government have got to realise that the scheme cannot go on forever. I was against the scheme from the start, all these stimulus packages just shift demand forward meaning the car industry can just keep producing at an inflated rate and not address the fundamental problems of over-production and falling demand. Once the scheme ends demand will fall again and we will be in the same position as we were before the scheme started, except we are all in a little more debt with very little to show for it. The jobs will still be lost and the factories will still close.