Sunday, May 10, 2009

Car scrappage scheme 'unpopular'


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This is a follow up to a previous post I did on the Car Scrappage programs being done by different countries.

By Brian Milligan
Business reporter, BBC News
Page last updated at 04:58 GMT, Saturday, 9 May 2009 05:58 UK

There is growing evidence that the government's forthcoming scheme to scrap hundreds of thousands of old cars is not that popular with motorists.

A new survey suggests most people who have studied the scrappage scheme have decided not to take advantage of it.

Researchers from car price guide Parker's questioned 600 people online.

It found that 70% of respondents said the scheme was not generous enough, and overall 81% said they would not be taking advantage of it.

'Massively disappointed'

The scrappage scheme starts on 18 May. If your car is at least 10 years old you can scrap it, in return for a substantial discount on a new car.

The government will provide a £1,000 subsidy for each car purchased, and manufacturers will provide at least a similar amount.

But Kieren Puffet, the editor of Parker's Guide, said many motorists have managed to find much larger discounts under existing deals.

"They're massively disappointed," he said. "They were hoping for a lot more from the government."

Julia Smith, who lives in Basingstoke in Hampshire, is one of those who initially thought the scheme would be useful, but has since decided against it. She was going to scrap her 13-year-old Volvo, and buy a new one instead.

With the scrappage scheme discounts, a brand new Volvo would have cost her in the region of £21,000. But she then found exactly the same model with less than 10,000 miles on the clock for £17,000. A saving of £4,000 proved irresistible.

"In practice this scheme is just not working," she says. "I think it just hasn't been thought through terribly well."

Lukewarm response

The car industry had lobbied the government to pay a subsidy of £2,000 per car, rather than just £1,000. A similar scheme in Germany was launched back in December, and the government there pays the larger amount. Unlike the British plan, it also includes cars up to one year old.

Paul Everitt, of the Society of Motor Manufacturers and Traders, is lukewarm about the UK scheme.

"We've been dealt the cards that we have," he said. "Our job now is to make the best of it."

But the government says motorists still stand to make savings through the scheme.

Gareth Thomas, the consumer affairs minister, said: "I don't think this will be a flop. But you're right to say there are good deals in the market already."
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