SCRAP: Our questions…
April 27th, 2009 by Richard Aucock
GOVERNMENT risks the initial positive impetus of the scrap scheme being washed out, as doubts creep in.
A lack of clarity over the details of the scheme has meant speculation over the weekend has been rampant – with many contradictory messages flooding the car market.
Car dealers, manufacturers and buyers are currently in a state of confusion, as loopholes are sniffed out and the scant fine print of the initial announcement poured over.
This is regrettable, given what a positive feel-good buying stimulus the scheme could be.
The Car Dealer Magazine hotline has been red-hot with messages of confusion…. So much so, we’ve decided to set our own questions to be answered.
It is hoped a crunch meeting with the BERR and SMMT today will resolve these. Good job. Our evidence is that it’s quite a list…
• Do cars actually need an MOT?
Mandelson’s official document says they do – but it also mentions SORN, which The Times has taken to indicate an MOT ISN’T required. Which means neither will road tax or insurance, either…
• What checks will be imposed?
Dare we suggest this, but if an MOT is needed, what’s to stop someone putting an MOT on any car, roadworthy or not? It will be scrapped, after all, so checking it will be difficult…
Furthermore, couldn’t car buyers get round the 12-month ownership rule by getting someone else to buy the car, then transferring ownership once the deal is done?
• Why are car makers stipulating ‘maximum’ £2k allowance?
Does this indicate that they could sign up for part-funding the scheme – say, putting in £500, matched by £500 from the Government?
• Do car makers have to offer it on ALL cars?
Some makers, such as Smart, are saying only limited models will be included in the scrappage scheme. Others are suggesting that only car makers who promise EVERY car will be included can take part.
This will hit brands such as Nissan, who are soon to sell the low-margin Pixo. It may even preclude them considering the scheme at all…
• Can it supplement other sales incentives already in place?
Some say the Government will say the scrappage incentive has to take the place of regular incentives. Others firmly state it is ON TOP of these. MP Ian Pearson makes it no clearer, by saying ‘You will get at least £2,000 towards a new one.’
What’s the real situation? After all, some makers offer thousands off cars WITHOUT the scrappage incentive…
• What about car makers raising list prices?
What’s stopping car makers cynically raising prices of cars in early May, to offset the cost of the scrappage scheme?
• Why is there no low-CO2 element to the new cars purchased?
Is this to support British car makers, many of whom don’t offer low-CO2 models? Doesn’t this remove the ‘green’ reasoning for the scheme – which many European countries have used to justify such schemes in the first place?
• Why is Government not offering the full £2000?
Talk was that the Government would contribute the full £2000 fund. So it was a total surprise to find, the evening before, that it would not. This caught MANY car makers on the hop.
So, a simple question… why the last-minute change?
Come back soon (we hope), for answers to these questions and more…
BUDGET: Reaction to scrap scheme
Tags: Budget, government, new car scrap, scrappage
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