It turns out that it won't be a £2,000 voucher after all, the 'government' (i.e. the taxpayer) pays £1,000 and "the car industry will have to contribute £1,000 to the grant ... Larger and more expensive cars already tend to carry discounts of around £1,000 – meaning that half of today's £2,000 grant will already be priced in for many vehicles." (see e.g. The Graun)
In other words, the much vaunted £2,000 is now £1,000. So the vouchers would only be taken up by people who own second hand cars worth less than £1,000 (or else they'd sell their car and put the proceeds towards a new one), of which there are probably a fair few (a million? half a million?) but they are hardly the people who can afford to or wish to buy a new car, or else they wouldn't be driving round in an old banger*.
But The Sun newspaper is happy, the motor industry seems to be happy and it will cost the taxpayer very little. What's not to like?
* For avoidance of doubt, I drive an eleven year old car that cost me all of two grand last year and serves its purpose handsomely.
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16 comments:
Old Banger?! Old Banger?! I'll have you know my 15 yr old cabriolet is just like its owner - creaks a bit, now and then but still has a few miles left on the clock - and is still a 'goer'!
Old Banger indeed!
I suspect that the £1000 from the manufacturers would be spirited away somehow (perhaps by putting the prices up) even on cheaper cars.
My car is 15 years old and worth £500 at best but, as you say, I wouldn't be in the market for a new car anyway (unless someone offers a 0% finance deal, which I doubt they will).
WFW, K, that makes three of us who aren't interested. But that's the whole point. That's what makes it genius.
MW, wouldn't mind checking my figures would you?
I've estimated the effect and what the Treasury expects from the scheme.
http://soc-liberal-party.blogspot.com/2009/04/car-scrappage-scheme.html
I have a ten year old car. Bought it last year for 750 quid. Cheap to run. Dont want a new one. If i could afford a newer car i would have got one. Load o pish, the whole thing!
RCN, that makes four out of four who aren't interested, so far.
AH, nice try, but you're missing The Big One, the Worst Tax Of All, VAT.
Assuming that none of those sales would otherwise have happened, and the average price paid for a new car is very low at £7,666, the VAT that the govt gets back is £1,000 (plus a bit of income tax or corporation tax). So in theory, HM Treasury might come out ahead.
It strikes me, a simpler way to do this would be to scrap VAT on car sales and see what happens. Once we've left the EU, of course.
MW, well spotted - I'll update it. Thanks.
Using the £14,000 estimate, the Treasury actually GAINS 330m!!! (14,000 is average price of a new car btw in 2008)
Having already once bought a new car and faced up to the massive drop in value due to depreciation I'm not in any hurry to go through the experience again. If this scheme had also applied to nearly new cars (say less than 3 years old) then I might have been slightly tempted.
Why is the 2,000 mile , 9 month old car I'm looking at costing £2,000 more than the undiscounted 'new' price.
MW can I claim the £5,000 off the electric car AND the £2,000 for the scrapy tax? if I spend £500 for a heap + £3,000 for the
MYCAR that is selling at £9.999
I can probably find someone to buy it at £6,000, pocketing £2,500 on each one.
Why in no time I would have enough for a proper car.
Leave it to those MPs to find a small space to slide their noses into the trough!
Its a bit off topic this but (and apologies I cannot find the research link) did you know that if no more cars were ever built, there would be enough life in all the existing cars to burn all the petroleum in currently known stocks.
Yes I know the oil stock numbers are much inflated/deflated depending on if you have an interest in the dangerous diversion of peak oil theory
RS, are you talking about 'reserves' (commercially viable at current market prices) or 'resources' (what's physically there)?
WV: flint
Am talking about what the Greens say is running out so fast, the impending chaos is going to serve us right. A good fear incentive for the Browns to burn it ever faster?
The research I cant find, was greenery so it might be bollox... but plausible. It just fits in with the post... Why the £2k? What for. Diversion etc.
There's enough undiscovered fossils in the ground to bring the dinosaurs back if we really want to. But that would be very expensive. So why do it? Why not go for cheaper non carbon energy. We would all get wealthier, especially our descendants i.e.,
* matter conversion to energy(nuclear fast reactor then fusion). Contrary to apparently self evident truths is renewable. There's enough uranium in the crust and sea to outlive the life of the planet at current demand
* sun (currently about 150,000 Terrwatts continuous supply (current global energy demand about 15 Tw) There must be away to make this free stuff run our cars surely
PS "WV: flint" what is this?
I'll continue to enjoy the use of my wife's 15 year old car. She has no intention of replacing it with a model subject to a much higher road tax.
In my opinion, the guys behind the program forgot to think about the buying practices of a middle-class driver. These are the people who usually have two cars at the most and would not think of trading or replacing them anytime soon.
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