Car Scrappage Scheme

gnasher328 · 29 April 2009 at 12:18PM

I am disgusted by this latest con. Not many people seem to realise just how UNenvironmentally friendly it is. Manufacturing even a small car has much more of an impact than running a good condition old car to the end of its life.
It just shows how this government has completly lost the plot and where their true interests lie. Why should we take any notice of the rest of the green rubbish they shove down our throats when they do something like this.
Gnasher

artybird · 29 April 2009 at 12:25PM

I've been keeping an eye on updates - I hope the info comes out OK below - taken from the Broadspeed website and I found it the most up to date info I could find...

I have an 11 year old car on its last legs and am in a position to buy - most likely a Kia and will be going to dealership on Friday to find out what they offer if you're in a position to order the vehicle there and then as Kia dealers are being encouraged "to take orders now under the new scrappage scheme". We shall see.

Hope it's of help until more info becomes avalailable....

IMPORTANT: NEW BUT PRE-REGISTERED CARS WILL DEFINITELY NOT QUALIFY FOR THIS SCHEME (AT ALL)

IT IS UNCLEAR YET WHETHER ALL CAR MAKERS WILL SIGN UP (REVISIT THIS PAGE IN 7 DAYS)

PLEASE REVISIT THIS PAGE IN A FEW DAYS: WE WILL POST FURTHER INFO AS IT BECOMES CLEAR

GENERAL CONDITIONS

1. The £2,000 grant is made up of £1,000 from government with matched funding from industry. The scheme will operate from mid-May until March 2010 or until the government funding has been used.

2. It applies to commercial vans (up to 3.5 tonnes) as well as cars that are 10 years old or older.

3. The scheme is a voluntary scheme so not all manufacturers or dealers may participate.

4. How to apply: The dealers will do all the paperwork for motorists participating in the scheme and arrange for the old vehicle to be scrapped. The dealer will check that the vehicle being traded in and the new one being bought qualify under the scheme:-

OLD VEHICLE CONDITIONS

Passenger car or small van up to 3.5 tonnes
First registered in United Kingdom on or before 31 July 1999
Currently registered with DVLA to the registered keeper making the application, or currently on Statutory Off Road Notification (SORN)
Current MOT test certificate
Registered Keeper must have a UK address
The registered keeper has been the registered keeper of the vehicle continuously for the preceding 12 calendar months before the order date of the new vehicle

NEW VEHICLE CONDITIONS

Passenger car or small van up to 3.5 tonnes
First registered in the UK or after the date the scrappage scheme is launched and declared new at first registration in the UK with no former keepers
UK specification vehicle
Registered to the same registered keeper as the registered keeper of the eligible vehicle to be scrapped

Several manufacturers have confirmed that their dealers will be taking part in the Government scrappage scheme.

It has been confirmed that if a manufacturer is taking part in the scheme, they must offer their Entire Model Range (not pick and choose what models to offer).

Some manufacturers have indicated they will put additional incentives onto certain models.

TAKING PART ARE:

Audi
Full range available. It is asking interested customers to register at its website and will update them with more information when it's available.

BMW
BMW is supporting the scheme across its range, and is marketing with an offer of an extra £1,260 dealer deposit contribution towards a new 116i Sport with BMW Select finance.

Citroen
In addition to the scrappage scheme across its entire range, Citroen is offering customers a guaranteed trade-in of £1,000 for cars registered between 1st January 2000 and 31st December 2002 and £750 to customers with a car registered between 1st January 2003 and 31st December 2004. There is no obligation to scrap these vehicles.

Fiat
Fiat will take part in the scheme and has already announced that it will be matching the Government’s £1,000 on its Panda Active Eco with £1,100. Customers can pay a no deposit four year finance deal at 6.5% APR to pay for it.

Ford
The scheme will be available across Ford's entire range of vehicles. Based on the information available so far, Ford plans to boost the potential of the Government's vehicle scrappage scheme with the addition of supplementary discounts on all its larger cars, which together represent savings of up to £4,500 on a new Ford Mondeo, for example. Called "Scrappage Plus" - the discounts will be available over and above the Government and industry's shared £2,000 subsidy. They start at an additional £1,250 for a Ford Fusion and extend to £3,000 for a Ford Galaxy. Nigel Sharp, Ford of Britain managing director, said: "We look forward to receiving full details of the programme and working with dealers to make the most of the scheme for our customers."

Hyundai
Hyundai has said it will meet the £1,000 that the Government is putting up for scrappage. Hyundai’s managing director Tony Whitehorn said: “Although we had hoped for a £2,000 contribution from the Government, £1,000 will help drive business through our doors at this time of recession."

Kia
Kia will support the scrappage scheme, and has asked dealers to take orders now under the new scrappage scheme.

Mitsubishi
Mitsubishi’s full range will be available.

Mercedes-Benz
The full Mercedes-Benz range will be on offer to scrappage scheme customers.

Nissan
Nissan will be taking part in the scheme which will see all of its models made available. However, Nissan is also extending the £2,000 minimum trade-in offer to models aged 8-10 years old for any customer choosing one of the car maker’s British built range – that includes any new Micra, Note, Qashqai or Qashqai+2.

Peugeot
Peugeot is participating in the scrappage scheme but is asking customers to make their interest known via its website. While it's not yet clear which models will qualify, a 107 is featured in its scrappage scheme marketing in the newspapers today.

Proton
Full range available.

Renault
Renault will be offering the scrappage scheme. It plans to offer even greater incentives on its new car and van ranges than just the £2,000 outlined in the scheme. Twingo, Clio, New Kangoo and the new Megane, plus its LCV ranges will feature in the offer.

SsangYong
Full range available.

Suzuki
Suzuki will be participating in the scrappage scheme but is still awaiting the full details before providing more information.

Toyota
Toyota will take part but is waiting for more information on the scheme.

Vauxhall
Vauxhall is right behind the scheme but is waiting for further details. Customers are being directed to its website

Volvo
Customers can use the scrappage scheme on any new Volvo and can get an additional deposit contribution if the customer buys the car on manufacturer finance. For example, on a C30 Drive S Volvo - the customer will get an extra £2,027 on top of the £1,000 from the Government and £1,000 from Volvo.Hyundai has said it will meet the £1,000 that the Government is putting up for scrappage.

Volkswagen
VW has welcomed the initiative and intends to participate in the scheme. Exact details of VW’s participation in the scheme will be announced to potential customers in due course. In the meantime, buyers are being encouraged to register their interest in purchasing a new VW with the help of the scrappage scheme at their local dealer.

THE UNDECIDED MANUFACTURERS:
Honda hasn’t decided if it will be taking part in the scheme or not and is waiting for further details. Seat is also still waiting for more details before committing. Skoda has welcomed the government’s vehicle scrappage scheme, but is yet to confirm if its whole range will be included. Perodua hasn’t decided if it wants to take part yet.

Bronnie · 29 April 2009 at 12:48PM

I think at the lower end of the market, if your personal circumstances fit, you can work this scheme to your advantage.

Hyundai are putting in £1200 dealer contribution, under scrappage scheme, from 18th May Hyundai i10 Classic is available for £4995.

DD's car is eligible and is currently being topped up with oil daily, as the engine gasps it's last! Wouldn't be able to sell it privately and it's P/X value is negligible, so the scrappage deal stacks up for me.

The_Catman · 29 April 2009 at 12:59PM

ray_gillespie wrote: »

There seems to be a bit of a myth about not paying VAT on used cars. In reality, you pay VAT on pretty much ANY car you buy, no matter if it's new, 'nearly new' or an old banger. There is no 'extra' VAT added on top of the price of a used car, but the price already includes the VAT that the original owner paid on it, less any depreciation. For example:

John buys a new car for £11,500. This works out to be £10,000 before VAT. The dealer adds the VAT, at 15%, of £1,500. So the total John pays is £11,500. Whatever price you see a new car for, it includes the VAT that the retailer has added. So this car would be advertised at £11,500.

John gets bored with his new car after 2 weeks and decides to sell it back to the garage. He originally paid £11,500 for it and it has depreciated by 10%. He sells it to the garage for £10,350. The VAT is not 'removed' from this. It is already included as he has already paid VAT on the car and cannot claim this back. For all intents and purposes, the full price of the car when new was £11,500. That included VAT, paint, seats, the radio, tyres, everything.

The garage buys it off John and then sticks their profit on top, so they advertise it for £10,500, hoping to make £150 profit.

Peter wants a 'nearly new' car so he buys the car from the garage for £10,500. There is no extra VAT on this price as it has already had VAT paid on it. But that's not the same as saying it's VAT-free. It is VAT-paid, not VAT-free.

There may be exeptions as lemonade pockets says, and the dealer will pay VAT on the difference between the purchase price and new price. But you don't 'save money' on used car because you don't pay VAT on it. You save money because they depreciate in value so quickly.

Almost 100% right....

If the dealer has paid £10,350 for the trade in and sells it for £10,500 then it has made a paper profit of £150, and this is inclusive of VAT, so the actual profit for the dealer is £130.43 and £19.56 is VAT payable to HMRC at the current 15% rate.

As for the scrappage scheme itself, the only new money on the table to consumers is the Govts £1000 contribution, the other £1000 from the "industry" will come out of the deal somewhere else, either dealers or manufacturers margin.

The Govt wins as well as mentioned above, as a car sold for £10000 includes about £1300 VAT, so if this scheme generates sales of new cars that wouldn't otherwise happen then the Govt is in profit for every car sold for more than £7667

TC

Garnett-Devon · 29 April 2009 at 1:14PM

There are a lot of scepticle people on here who are missing out. I placed my order under the scrappage scheme last week and the car will be delivered on 20th May. I have a 12 year old Skoda nad the MOT runs out on 3rd June so time eas critical.

The Kia list price was £6195. If you shopped around you could get it down to £5950 but no dealer had the margin to go beyond this. Sure you can't get the £2000 off of the £5950 price because Kia was offering the £245 subsidy.

We actually paid £4195 for a brand new Picanto on the road. That includes a year or RAC cover. The road tax is £35 per year. Most importantly you don't even need to have it serviced by a Kia Dealer for the 3 year warrenty. As long as you use original Kia parts a local garage can do this and stamp the book.

I think that we have got an incedidible deal.

Garnett

Lemonade_Pockets · 29 April 2009 at 1:25PM

To summise my opinions discussed at length in previous threads.

1) Anyone expecting £2000 off the previously discounted prices is going to be disapointed. This is simply because Dealers and MFR's cannot afford to reduce margins by another £1000 per unit. Doing so would mean they make a loss on all cars sold under the scrappage scheme - this would be completely counterproductive to the aims of the scheme.

2) The net benefit in most cases will be £1000 to the consumer this is because as TC pointed out this is the only new money being put into the equation. There maybe some exceptions to this where you save even more but i doubt it will be the norm.

3) IT was only ever loosely billed as a green scheme. There are various figures to support either side of the argument. The fact is there are no comprehensive studies that accurately asses the situation. During the budget the government gave up on this angle completely and have not restricted the benefit to low polluting cars. This is simply because the home brands that we do have make dirty great cars so it would be stupid to exclude them.

4) The real reason like it or not for this scheme is to help out the motor industry. It is virtually self funding at £1000 a time so it make little difference whether it is a success or not.

5) The reasons for the price increases in recent times is to reflect the value of the £1 vs the €. Margins are actually slimmer now than before the £ crashed as MFR's have not passed on all of that cost to the customer.

DealDrivers_company_representative · 29 April 2009 at 1:49PM

There is a restriction trying to be imposed by the Govt that the new car has to be delivered within 3mths of order...that automatically excludes many cars which take longer due to where they are built and shipping times (i.e. 6-8weeks extra for cars built in Japan, Mexico, Brazil etc), and in some cases due to demand on certain engines which is delaying build availability (i.e new Ford K'a now at 16-20 wks)...and will put a huge demand on spare UK stock (which has been reduced in recent months by lower production) - so may easily drive stock prices up.

Manuf'rs may have to negotiate with their dealers in other countries to allow more production slots to be allocated to UK dealers instead...not easy as that affects dealer's revenues abroad- they will have less stock to offer their own customers.
Factories across the world also have the 2 week summer shutdowns looming which extend leadtimes even more.
Several mfrs have already told their dealers that no cars ordered prior to 18th May will be able to claim against the scheme, as their orderbank on many brands includes car models that don't have a £1000 in left them as a margin.
Manuf'rs who have models on 3-5mths leadtimes also have to decide what to do as they cannot meet the 3mth limit...opt out of the scheme completely perhaps if the Govt insist on a 3mth or less delivery? it also means that in the few months the scheme has to run, the 'greener' cars due to come into production in coming months may have to be excluded.

Manufacturers have to be given a chance to find this extra £1000 previously unbudgeted for, so of course some prices will have to go up where there was less than a £1k margin in them to start with if you want the percentage discount you are used to seeing to remain in place.

This is why the scheme is not yet 'live'..asking your dealers to do a deal now is pointless until their manufacturer has been able to confirm how the new car pricing has to be structured around it. Dealers have no complete process yet in place with their manufactuer nor with the Govt to allocate each £1000 from the available 'pot' and reclaim the Govts share of the deal.
No money will be allocated by the Govt to a sale of a new car until 18th May when they have said they intend the scheme to start.

The Govt's request that all cars in the manuf'rs ranges must be included creates its own issues as some models will have to be priced upwards to create the £1000, and others simply cannot meet the delivery restriction.
Don't look at discounted prices now and assume that is the price you can reduce by £2k from 18th May, as they are already discounted down from the published list prices...that discount level will have to be used, in part at least, to help fund the scrap claim if you don't want the list price to up instead.

Manufacturers are not ripping anyone off...get it in perspective:
Think of a car price as a cake, it can only be sliced in so many ways. If one big slice is existing discount, and the rest of the slices are taken up by production and distribution costs and dealer overheads, then the slice which is discount will get smaller to accommodate room for a new 'slice' for the £1000 to be put aside....or they put the car price up with a new published list price to make the cake bigger to accommodate the extra £1k. They cannot create £1000 spare revenue from existing costs...if there was £1k spare in each car the industry wouldn't be in the state it is in.
Either way...you're not going to like it!! You'll still be getting a new car at less than published list price, but whether the deal is as good as now when discounts are simple and high, and before the mfr's either have to divert £1k of existing discounts aside or put the car price up in case the customer wants to scrap an old car...is another story.
On a positive note..getting a new car before end of December is worth it to save having to pay 2.5% more vat on cars from Jan 1st!

[Deleted User] · 29 April 2009 at 1:50PM

I have been looking into this lately and found dealers seem to be more willing than some people have found.

Subaru is taking part in the scheme. With the scheme and some haggling I'm looking at around £3000 discount plus some extra options on the car, 3 years interest free finance and free gap insurance. That's on a little Justy, around £10,000.

I'm going to see what Mitsubishi are offering on their Colt too. These two cars are similarly speced but each have individual advantages and disadvantages, so I have something to haggle with.

I think peolpe just need to be firm when haggling. Don't be afraid to say what kind of discount you want, and by starting low you can get some extras thrown in by coming up a bit. Don't forget that there are lots of car dealers and lots of manufacturers, so if the one you want isn't giving you a good enough deal there are always plenty of other options. Mention the rival cars you are interested in and what advantages they have, so it's clear you have seriously considered them and can walk away if you have to.

Armengar · 29 April 2009 at 1:59PM

As I have stated in my other post, I intend to use the scrappage to my advantage. I am *hoping* to do a deal (through a broker) whereby the brokerage price may be £15000 so I would like the dealer to raise the price to £16000 then discount me £2000 for scrappage. Thus I get the £1000 from the government, he doesnt need to find an extra £1000 (as he was going to 'sell' the car for £15000 anyway) and I get the car for £14000.

whether or not they will do this (as I will need to get a car to them obviously) is debateable (and most likely not possible). Then again I might be able to do the same at a dealership if I can bargain hard.... But i'd be silly not to try.

roll on May 18th (that being said the missus is test driving the SMax next weekend after the all clear from the doctor!)

Hintza · 29 April 2009 at 2:13PM

Armengar wrote: »

whether or not they will do this (as I will need to get a car to them obviously) is debateable (and most likely not possible).

This will probably be your biggest sticking point, but good luck.

The interesting thing was in artybird's post; the manufacturers that are still waiting to see, one wonders why, they must forsee some issues here?

The fact that Fiat (might) only have the 1.1 Panda available under the scheme suggests that they do not have the margin available to give the extra £1,000 off.

Car Scrappage Scheme

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