Car Scrappage Scheme

A question about : Car Scrappage Scheme

Car scrappage Ј2,000 damp squib?

Of the new Ј2,000 for scrapping 10+ year-old cars only Ј1k comes from govt, the rest from the manufacturer, but we don't know yet if it comes off list price or haggled down price. Plus it's only for new cars meaning there's 15% VAT, whereas you needn't pay this on nearly new.

To discuss the scrappage scheme click reply.

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Best answers:

• The scheme is a waste of time. The manufacturer has to contribute Ј1000, so the prices of the cheapest cars will go up to compensate. Also, those discounts dealers have been giving to get customers in will soon dry up.
  All in all, if you have a banger you want to get rid of, and can afford the extra Ј6k or so (or was probably going to buy new anyway whether the scheme happened or not), then you may as well go for it. But don't be led in by thinking you're getting a great deal, as you are not.
• Althoiugh I don't agree with Ling's conclusions she does highlight quite a good example of how the manufacturers are going to implement this scheme. Which comes as no surprise to any of us.
  Also if a car sells for Ј5,000 + VAT (Ј750) then this scheme will only cost the government Ј250. Obviously over simplified and assumes the buyer wouldn't have bough a new car without the scheme.
• Would anyone like to guess my views on it?
• Good scheme, I don't care if it's my VAT they give back, or the mfr's discount is already spoken for, it's all money that I won't have to pay to replace my old car with a new one. The cost of change will be around Ј5000 for a i10, I don't get the hassle of selling my old car, and I save another Ј400 on the tax and MOT's, so that'll cover the service costs as well.
  I wouldn't have thought of changing for a year at least, then for a second hand car otherwise.
• Some of the deals are not what they first seem. I have taken a look at the Ford Scrappage scheme for the Fiesta advertised on the ford website, says Ј2000 government scrappage scheme + extra Ј500 saving, looks good.......
  The example they give is the Fiesta Zetec 3dr 1.25 82 PS petrol with Free Bluetooth = OTR Ј12,295 - Ј2,500 = Ј9,795
  Now at present you can get the same car from dealdrivers for Ј10,039 + Ј135 for Bluetooth = Ј10,174.
  So yes you save Ј10,174 - Ј9,795 = Ј379 by trading in your old car.
  BUT the government has put Ј1,000 into the deal, so Ford has actually raised their prices by Ј1,000 - Ј379 = Ј621 and put NO extra of Ford's money into the scheme.
  The real saving will come if the brokers prices are competitive and then the scrappage scheme savings are on top of this, we will have to wait and see.
  Another thread also finds worse https://forums.moneysavingexpert.com/...html?t=1653755 that you will pay extra Ј800 using the scheme on a Ford S-Max. Add in the Ј1000 the goverment puts into the deal and ford are making Ј1,800 more on the S-Max than before scrappage.
  I know some people will argue that the scheme is to benefit both the Car Manufacturers and the public, but this is all costing us long term in our taxes and most of the Car Manufacturers are foreign benefitting from the UK tax payers.
• I really don't get the point of the scheme at all. You would think that they would tie it in with buying a greener car but no. You could trade in a fiesta for a Hummer if you wanted...not very green at all.
  So it looks like the scheme is to keep people in jobs, but have they thought about the effect that this will have on local mechanics / garages who service these older cars? If everyone buys new then trade will drop for the local mechanics which could lead to job cuts again.
  Another big question is what happens to the car that gets taken in? Some of them will be perfectly good, usable cars - do they crush them? This would leave a shortage of older cars on the market and push prices up. Leaving the people who can only afford older cars even worse off?!
  I am struggling to think of a single worthwhile benefit of this scheme.....
• theres about 3 or 4 threads on this S crap subject,could they not be combined?
• I spoke to the local Nissan dealer about this scheme over the weekend. He says the Ј2k is off the retail price not the haggled down price. So basically you might as well go in and see what offer they would do for you anyway, it may match the scheme the Gov are offering without all the rigmarole of having to have MOT, tax and having to have owned the car for a certain length of time.
• i've been 'uuuming & aaarhing' for a few weeks now whether to buy a new Fiat 500, and when this scheme was announced, i thought this would be a great opportunity to trade in my old Fiesta which is on its last legs.
  but no...................
  apparently Fiat have decided that as the 500 is such a good selling model they are not subscribing to this scheme. To add insult to injury, i was offered a paultry Ј250 off the showroom price of Ј11,300 - its not exactly a cheap car either !
  seems i can only get this deal off either expensive cars or rubbish models that no one would want. Doesnt seem as though a lot of liason went on with the manufacturers before this scheme was announced.
  WILL BE WRITING TO MY MP AND OTHERS TO HIGHLIGHT !!
• It should have been simple - you buy a new car at the price shown. and if your car is 10yrs + you trade it in and get 2K off this price. Then the car dealer gets the 2K back from the government.
• I would have been really pleased had this scheme been available two years ago when I traded in my thirteen year old Nissan Sunny. It failed it's MOT and would have cost Ј250 to get through it so I bought a year old car. I got next to nothing as trade in on the Sunny and with this scheme would probably have paid less for a brand new car than I did for a year old one.
• I went into a Ford dealer's yesterday (28.4.09) and they will bring their scheme into operation in May. We know they raised their prices by Ј1000 but they appeared to have dropped these as a "special offer". However the salesman told me that the scheme only works on the proper retail price. This means they will increase the price by Ј1200 so there goes their Ј1000 contribution but the other thing that worries me is that I will only be getting Ј800 from the Government or does Ford charge the Government Ј1000 in order to pocket the other Ј200?
• The MOT on my 20 year old Polo expired on April 4th. As the scrappage scheme was widely anticipated I didn't renew it. Now it seems that in order to qualify to have my car crushed I have to get new tyres and other stuff (about Ј250 worth). I emailed my MP (Ruth Kelly) to ask if this wasn't a waste of resources but, of course, she hasn't replied.
• Not sure if this scrappage has to be in all cars sold or just the more expensive ones, but the car manufacturers probably dont make Ј1000 profit on a basic small car, so if they start giving away Ј1000 to people then they are going to make a loss....which cant be good either, they might aswell not make them. The German goverment is doing this too, but they pay the full Ј2000 so the car manufacturers dont have to pay nothing and sales are very good there.
  Also i would imagine if your driving arround in a 10 year old car worth Ј500 there a reason for it.....you dont have the cash to buy another car! If you had a spare Ј5k to buy a new car now, surely you would have bought a nearly new car a few months ago. Who knows, but we'll find out!
• 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 Ј11,500. This works out to be Ј10,000 before VAT. The dealer adds the VAT, at 15%, of Ј1,500. So the total John pays is Ј11,500. Whatever price you see a new car for, it includes the VAT that the retailer has added. So this car would be advertised at Ј11,500.
  John gets bored with his new car after 2 weeks and decides to sell it back to the garage. He originally paid Ј11,500 for it and it has depreciated by 10%. He sells it to the garage for Ј10,350. 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 Ј11,500. 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 Ј10,500, hoping to make Ј150 profit.
  Peter wants a 'nearly new' car so he buys the car from the garage for Ј10,500. 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.