SCRAPPAGE' SCHEME ISN'T FOR EVERYONE

Whether or not you have a used car that qualifies for scrappage there are already over 4,000 new cars on buyacar.co.uk that have over £2,000 off the list price. So what is the benefit of scrappage?

Our resident expert, Alex Davis, uncovers the truth behind the Scrappage scheme.

SEE THE BUYACAR SCRAPPAGE DEALS

As of the 18th May, the government's car scrappage scheme has come into effect. Although at first it seems like a great solution, in reality there are relatively few people that will benefit from the scheme

'SCRAPPAGE' SCHEME ISN'T FOR EVERYONE

THE LATEST SCRAPPAGE NEWS! - 30th December 2009

The government scrappage scheme finishes on 28th February 2010. A lot of manufacturers are stopping taking orders through the scheme now.

THE LATEST SCRAPPAGE NEWS! - 29th September 2009

250,000 cars have now been consigned to the scrap heap under the scheme.

The Scrappage scheme has now been extended

An extra 100,000 cars have been added to the number of scrappage vehcies that the government will fund through the scheme, taking the total to 400,000. In addition the age of vehicles qualifying for the scheme has been lowered. Now all private (not commercial) vehicles registered in the United Kingdom on or before 29th Feb 2000 will now qualify. Basically this will be all cars of V reg or older.

WHAT IS THE CAR SCRAPPAGE SCHEME? - THE LATEST NEWS! - 13th May 2009

The chancellor has announced a new scheme in the 2009 Budget to offer a £2,000 discount when a car, which is 10 years old or more is scrapped, and a new car bought. The vast majority of vehicles supplied will still be cheaper through existing discounts and we attempt to explain why.

Here at Buyacar.co.uk we have looked at the details and, for a large majority of car owners, the reality of the vehicle discount or "scrappage" scheme is not necessarily all it's cracked up to be. A new survey by Parker's Guide suggests that most people who have studied the details of the scrappage scheme have decided not to make use of it. They found that 70% of eligible respondents said the scheme was not generous enough, and overall 81% said they would not be taking advantage of it.

Buyacar.co.uk is advising its customers to be shrewd when considering the scrappage scheme and to think logically about the potential savings that they could forgo if they take up this scheme. Whilst we appreciate the government's sentiments in trying to stimulate the new car market, the principal beneficiaries will be the manufacturers, who are desperate to move stock, and the government in increased tax revenue.

From the May 18th 2009, in exchange for scrapping your old vehicle and buying a new one, the Government and the vehicle manufacturer will contribute a total of £2,000 towards the purchase of a new vehicle. The scheme is a voluntary for motor dealers and manufacturers who have decided to participate.

1. The scheme is open to cars or commercial vehicles up to 3.5 tonnes


2. To be eligible, the vehicle you scrap must have been first registered on or prior to 31 August 1999


3. The purchaser of the new vehicle must have been the registered keeper of the scrap car continuously for 12 calendar months before the order date of the new vehicle


4. The scrap vehicle must have a current MOT test certificate before the date of order for the new vehicle


5. The new car must be registered to the claimant as the first registered keeper


6. The scheme will be available to the first 300,000 eligible claimants or until 31 March 2010, whichever is sooner.

The scrappage scheme: a 2000lb red herring?

1. The major unpublicised flaw in the scheme is that generally the £2000 scrappage discount applies to vehicles sold at "list price", which is the manufacturer's recommended retail price or RRP, because manufacturers are being asked to contribute £1000 to the scheme. Our experience is that most manufacturers and dealers will strip away the majority of existing discounts, such as the ones we are able to offer, when the scrappage scheme is applied and not simply show an extra £2000 saving. Effectively most manufacturers will be offering 2 prices for every new car, one higher price with scrappage and a lower one without.


2. Buyacar.co.uk currently show savings on 5017 new vehicles of which only 946 vehicles have a saving of less than £2000 of the RRP. The average saving made by our customers being over £3000 with a maximum saving of nearly £15,000.


3. Buyacar.co.uk are still offering part exchange for vehicles over 10 years old so, for example, if your car is worth £500 to us in part exchange then the real discount offered by using the government scrappage scheme is only £1500.


4. Don't forget that just because the government is incentivising you to scrap your 10 year old car it doesn't mean that it's worthless. In fact you car must have a valid MOT to qualify for the scheme which, by definition, makes it worth something.


5. The scheme does not apply to pre-registered cars. Pre-registered cars are brand new cars that have been registered to take advantage of volume sales discounts. Pre-registration is a common practice within the new car market and can show customers huge savings on brand new cars that simply have the supplying dealer listed as the first registered owner. Cars that fall into this bracket will have to be ignored by any customer wishing to use the scheme.


6. The huge savings on offer from Buyacar.co.uk are eligible to anyone. Whether you have a 9 year old part exchange or no part exchange at all.

It is true that, since its announcement, the scheme has generated interest in the new car market. The reality of the scheme is that it is simply a marketing initiative for the new car industry rather than showing the majority of buyers any real savings.

Don't be fooled in thinking that this scheme is a 'green' initiative, it is not. The production of any new car produces a huge amount of CO2 and resources and, through the scheme, are able to buy the biggest gas guzzler your heart desires.

We urge our customers to do their homework, compare deals and to be aware that this is not a simple giveaway. The scheme adds more complexity to the new car buying process but remember that the most important figure to consider remains the same - The overall cost to change.

Which ever way you choose, your're still better off buying through Buyacar.co.uk

Finally, a real example from a Buyacar.co.uk customer that has placed an enquiry today (27/04/09). Mr Bloggs has a Volkswagen GOLF 1.6 H/b 5d CL registered in 1997(P) with 100,000 miles on the clock and would like to buy a new Ford Fiesta 1.4 Titanium 5dr.

Without scrappage Example

Mr Bloggs contacted Buyacar.co.uk with an interest in the scrappage scheme. He has a Volkswagen GOLF 1.6 H/b 5d CL registered in 1997(P) with 100,000 miles on the clock. We offered him £400 in part exchange against a new order.

Mr Bloggs is interested in buying a Ford Fiesta 1.4 Titanium 5dr which is being supplied for £11501, showing a saving of £2600 off list price.
Taking into account the allowance for his part-exchange, Mr Bloggs will be paying £11101 for his new Ford Fiesta with Buyacar.co.uk.

DISCOUNT through Buyacar.co.uk £3014

With scrappage Example

Mr Bloggs walks into a Ford showroom who are participating in the scrappage scheme. By default his VW Golf is valued at £2000.
The Ford Fiesta is quoted at £14115 with metallic paint which is the 'list price' or RRP of the car.

If he continues along this path, Mr Bloggs will drive away with his new Ford Fiesta 1.4 Titanium 5dr having paid £12115.

DISCOUNT through the scrappage scheme £2000

Conclusion

Mr Bloggs is £1014 better off buying his new car through Buyacar.co.uk. He actually has the opportunity to make further savings by selling his used car privately by taking advantage of our free used car advertising.

*Scrappage Deals

Smaller, cheaper cars are the cars that will give this scheme momentum. These cars are always the popular car in a recession anyway, so are selling well in any case. At Buyacar.co.uk we have worked hard to bring a broad selection of deals that actually do work out cheaper using the scrappage scheme. So if you are looking for a BMW 5 series or a Toyota Aygo we should have the right deal for you.

SEE THE BUYACAR SCRAPPAGE DEALS

PREVIOUS UPDATE - 23rd April 2009

Although the exact details and the implementation of the scheme are still being developed, we've summarised the details of the scheme so far.

We will update this as and when more information becomes available:

SCRAPPAGE SCHEME DETAILS

• In exchange for scrapping your old vehicle and buying a new one the Government and Buyacar will contribute up to a total of £2,000 towards the purchase of a new vehicle
• The scheme starts on May 18th 2009
• The scheme is open to cars or commercial vehicles up to 3.5 tonnes
• To be eligible, the vehicle you scrap must have been first registered on or prior to 31 July 1999
• To claim the Scrappage Scheme, the owner must be the registered keeper of old vehicle for at least 1 year and the vehicle must have an up to date MOT
• The scheme will be available to the first 300,000 eligible claimants or until 31 March 2010, whichever is sooner

Until more information is available from the government, we will not be able to confirm what vehicles the scheme will apply to and the exact amount.

We hope to have this information available shortly so please continue to check our website for updates or contact us for more information.

If you have already submitted a quote we will automatically come back to you once the information has been confirmed.