From The Metro:
The £2,000 incentive under the Government's "cash for bangers" car-scrappage scheme will be wiped out in just 88 days due to depreciation, it has been revealed.
From Monday, owners of cars 10 years old or more will get £2,000 if they trade in their old model and buy a new one. But according to price comparison company uSwitch.com, vehicle depreciation is set to be the "thorn in the side" of the scrappage scheme...
In total, new vehicles purchased under the Government's car scrappage scheme are set to lose £12.5 billion in depreciation after just one year, it said. Purchasing one of the top 10 most popular new cars costs £16,232 on average and this value plummets by 49% in the first year alone, while the UK's best-selling car - the Ford Focus Style - loses £8,635 or 51% of its value in the first year.
Drivers should read the small print on car insurance policies as the write-off value varies substantially between policies... "All drivers who are planning to switch their old cars for a newer model need to be prepared for a hike to their premiums of up to 30%."
I'm not sure how accurate the figures are, but that is pure genius.
What have we wrought in the UK?
1 hour ago
5 comments:
The other oft missed point with the car scrappage scheme is that dealers aren't offering discounts - it's the list price minus scrappage. When I bought my car (new) in 2001 I managed to knock £4000 off the list price and got a couple of extras to boot including metallic paint - grand total of about £5000 worth of discount. I didn't have an old car to trade in either.
On the subject of cars - if anyone has a company car but doesn't do an awful lot of company miles they really ought to consider that they can save a fortune in tax if they choose an old classic rather than a new model if it's market value is more than its original list price and more than 15 years old.
Quite, only buy a new car because you really really want it. Otherwise buy one two to three years old. Or be like me and buy lots of very old cars for 250 to 500 quid and drive them for two years and throw them away.
I bought my current car directly from the manufacturer when it was 1 year old and had been used as a company car by one of their staff.
It was as good as new and, compared to buying brand new, I saved not only the first year's depreciation (always the year in which most is lost because it includes the snob value of it being a new car) but also VAT.
I have wondered whether the scrappage scheme would have the consequence of second-hand values being reduced all the way down the line in order to maintain differentials.
Surely it's just a bit of eco-wibble window-dressing anyway. How many owners of 10-year-old cars would be capable of buying brand new replacements, with or without the 2K sweetner?
P, six per cent of us, allegedly.
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