SCRAP: Our simple Q&A explains all
May 8th, 2009 by Richard Aucock
SCRAP scheme is the word on every car dealer’s lips. Rightly so – it could be the shining white knight our industry needs.
But how exactly does it work? Well, if you want to find out, you’ve come to the right place.
Here, Car Dealer Magazine will run through the scheme for you…
Sounds simple to me: Darling’s giving my customers £2k off new cars
No he isn’t. He’s giving £1k – your manufacturer has to match this with their own cash. Don’t be fooled by what he said in the Commons…
The cheeky… anyway, who’s eligible?
Any customer agreeing to scrap a car registered on or before 31 July 1999 (T-reg or earlier). And, buying a NEW car.
That’s all new cars? Not just green ones?
Nope, any new car is eligible – a CO2 limit is not imposed. What’s more, the Government has also given the CV industry a boost, by saying that vans up to 3.5 tonnes are eligible, too.
So, no nearly-new cars included in the scheme?
Nope: only cars registered after the scheme starts. Excludes pre-reg models sitting right now on your forecourt, then.
What about the old shed they’re scrapping?
Well, it’s not necessarily going to be a shed – all cars must have a current MOT, road tax and insurance. They must have also been owned by the person who is doing the deal for a year or more.
No customers buying cruddy 1998 Ford Escorts from auction to get £2k off a new car, then…
Hang on… this sounds like it could get a bit complicated.
It is, rather. And the Government is putting the onus on YOU to make all the checks – ensure the car and customer qualify, that the documentation is in place, that it’s being used only on new cars, and so on.
This, dealer principals, means you’ll have to think about a staff training scheme. And, probably, put other checking systems and safety nets in place, too.
What do I do with the old banger?
You HAVE to get it scrapped – that means, at an approved centre, who’ll give you a certificate. This will probably form part of proof to the Government that you’ve done everything correctly, and can have your cash.
When does it all kick off?
Well, it’s going to be a quiet few weeks. Once again, as with the 15 per cent VAT situation, Darling’s not said the scheme must start right away. It commences in mid-May, and runs until March 2010.
Know what? All this is not for me.
Fear not – the scheme is voluntary. But, if you’re thinking about it, get in fast. There’s a £300 million CAP from the Government, matched by the industry – which means, effectively, it’s limited to 300,000 sales.
Once it’s gone, it’s gone. And, if it’s all gone before next March, then that’s it. No more cash will be pumped in.
But then, if it is all gone, that’s one hell of a lot of sales…
BUDGET: Reaction to scrap scheme
Tags: Budget, new car scrap, scrappage
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April 26th, 2009 at 2:53 pm
In the editorial above, you say the Chancellor (taxpayer) will only contribute £500 if the dealer contributes only £500.
Are you sure about this?
I was under the impression it was £1000 + £1000 or nothing. Are you suggesting the manufacturers can offer variable amounts??? Surely, that is wrong.
This confusion is killing consumer demand. This scheme has been a massive mistake (predictably). If consumers are confused, they don’t buy. If dealers need a “Q&A” then they must be confused, too.
Jeez, what a mess! Dog breakfast. And the industry WANTED this? At least another month before buyers start buying.
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I will mention that this scheme is not a dealer margin-booster. It is meant to be a VOLUME booster. Any dealer found using it to increase margins on a sale is basically stealing government (taxpayer) funds, meant for the consumer or embezzling manufacturer subsidy meant for the consumer.
Existing discounts should not be reduced, selective subsidy on different models outlawed and rolling-up with other discounts or including with finance offers is extremely bad practice. The consumer should surely do their deal, then get their clear and seperate £2000 back at the end.
Any attempt to cream off this subsidy into margin and I for one, will not be slow to accuse individual dealers and manufacturers of stealing (my and everyone elses’s) taxpayer contributions, or embezzling consumers’ scrappage subsidy.
Ling Valentine
April 27th, 2009 at 1:07 pm
Thanks for your comments, Ling. We agree, there are question marks – we based our questions on discussions with car dealers… but it now seems many people are reading many, many different things into the scheme! We’ve modified our story to speak of the bald facts… and have written a separate piece with the questions our dealer insiders would like answered.
We have also contacted the BERR, who have promised to respond, and been in discussion with the SMMT… who have said that the key meeting is under way THIS AFTERNOON!
Furthermore, the SMMT has JUST responded to opur initial queries, which we’re about to post. This really is a developing story, and the full facts are constantly emerging as we speak…