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What effect will the car scrappage scheme have on second hand cars less than 10 years old?

For example a 3 series 2005 BMW with around 50k on the mileage :) (considering buying one)

The other thing i was thinking is that people who have 10 year old cars are not the same people who would go out and buy a new car even if it was 2 grand cheaper.

Edited by LondonToManchester
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The scheme will be bureauocratic and costly.

It is, at present, time-limited, but may be extended. You will have to have owned the car for at last 12 months for the car to be eligible. Therefore, people will not buy old cars just to get the £2000, so second-hand prices willl not be affected directly. However, people who already own the old cars may be inclined to hang on to them, in order to trade them in for the £2k, which may push prices up.

There are gaping flaws in the system; in particular, rather than buy an old car to exchange to get the £2k, people will use just co-operative old-car owners to buy the new car with the discount, and then transfer the new car to themselves.

Further abuse will occur with forged documents.

Also, exactly how many people, curently having to drive a 10-year-old-car, will suddenly find the funds to buy a new car in the depths of a recession?

The manufacturers (or dealers?) are having to stump up half of the £2k themselves; so it replaces a £1k discount that could have been negotiated anyway.

The money the government is putting into the scheme is unlikely to stay in the country, considering that most of the cars bought in the UK are made abroad.

The old exchanged cars will have to have a valid MOT, so useable cars will be destroyed wastefully.

The scheme will be a flop for the above reasons, the only impact being a net loss to the UK economy.

Edited by happy_renting
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I've given this some thought overnight and I can't see it having much effect.

1. The sort of people who drive second hand cars of less than 10 years old (but who could afford to pay cash for a new car) are principaly using a 3-5 year old car to take the worst of the devaluation away. £3000-£4000 buys you a perfectly decent average mileage saloon car in this country. If you need the car for work and cannot do the maintenance yourself then this is a sensible option as you generally speaking have 3-5 years of trouble freeish motoring other than serviceable parts. (ie. Wheel bearings and suspension mounts don't fail, radiators don't corrode.)

2. The sort of people who drive cars of over 10 years old basically fall into two categories. I know because I have sold cars to exactly this group for the last 20 years. First low-income people who cannot afford anything better and generally either drive uninsured or have some sort of quasi-legal dodgy scam on their insurance (claiming lower mileage, insured as second driver etc). This is obvious, as it makes very little economic sense to buy a £200 car and then spend £400 a year insuring it properly. And a second group who can practically and cheaply run a banger. The bangernomics crowd. I've always run bangers because it is an extreme example of 1 above and I actually enjoy fiddling around with them and learning. You suffer almost zero depreciation but you have to know a good banger from a bad or you just own a money pit. Neither of these groups will be interested in a new car since however cheap it is it is still going to devalue at £1000s per year. My 1994 Previa is worth about £300 less than when I bought it 4 years ago. That is less than 1p a mile in devaluation and I've spent almost nothing on it.

Additionally, there is little point in owning a 10+ year car nowadays other than the simplicity of maintaining it yourself and the massive cost saving of doing that. The purchase cost of a 2000-2002 car is little more than a 12 year old banger. The only thing that stops me getting a newer Previa is that they are significantly smaller and have all sorts of computers and other wizzardry which makes then more tricky.

That only leaves middle class types (like my Dad) who buy a new car for cash every 10-11 years and factor in the depreciation over the course of its life. Not a bad idea since you know the history of the car and you benefit from servicing the car well since anything you repair is enjoyed by you for the life of the car. Unfortunately however these people tend to keep the car until they face an unnacceptable large and uneconomic bill for repair and they USUALLY find this out when the MOT is due. At that point they make a decision to stop throwing money at it. But for this scheme, the car needs to have an MOT to qualify and I think you'll be hard pressed to find any car with a full or nearly full MOT for less than £400, since the MOT alone is £50. That means the gain is £1600 max and some of that will be eaten away by the dealer/manufacturer raising their price by £1000 before discounting it again.

The way to stimulate the car industry is have copious amounts of insanely cheap credit for the live-for-today muppets out there to buy a flash car beyond their natural means. Unfortunately that has been tried and it has nasty after effects.

Edited by GregG
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Quite.

The scheme is a joke, and should not have been implemented at all. Mostly, I'm annoyed as my tax money will be going out of the country.

I suppose we have to wait for the full clarification...

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I doubt it will have any effect as (as you indicated) it will have no effect anyway. If it did work you could argue that supply and demand squeeze on second hand cars would mean 9 year old cars would become more expensive bumping up the price of 8yr old cars etc.

However, who in the right mind is going to sell there perfectly functional family estate with less than 100k on the clock that still does 45mpg to get £2k off a £16k car that'll be worth £4k less as soon as you drive it off the forecourt.

What the f***wits also seem to have overlooked is anyone driving a 10 year old car probably has a sense of thrift and would be the lass person to indulge in a new car

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I've given this some thought overnight and I can't see it having much effect.

1. The sort of people who drive second hand cars of less than 10 years old (but who could afford to pay cash for a new car) are principaly using a 3-5 year old car to take the worst of the devaluation away. £3000-£4000 buys you a perfectly decent average mileage saloon car in this country. If you need the car for work and cannot do the maintenance yourself then this is a sensible option as you generally speaking have 3-5 years of trouble freeish motoring other than serviceable parts. (ie. Wheel bearings and suspension mounts don't fail, radiators don't corrode.)

2. The sort of people who drive cars of over 10 years old basically fall into two categories. I know because I have sold cars to exactly this group for the last 20 years. First low-income people who cannot afford anything better and generally either drive uninsured or have some sort of quasi-legal dodgy scam on their insurance (claiming lower mileage, insured as second driver etc). This is obvious, as it makes very little economic sense to buy a £200 car and then spend £400 a year insuring it properly. And a second group who can practically and cheaply run a banger. The bangernomics crowd. I've always run bangers because it is an extreme example of 1 above and I actually enjoy fiddling around with them and learning. You suffer almost zero depreciation but you have to know a good banger from a bad or you just own a money pit. Neither of these groups will be interested in a new car since however cheap it is it is still going to devalue at £1000s per year. My 1994 Previa is worth about £300 less than when I bought it 4 years ago. That is less than 1p a mile in devaluation and I've spent almost nothing on it.

Additionally, there is little point in owning a 10+ year car nowadays other than the simplicity of maintaining it yourself and the massive cost saving of doing that. The purchase cost of a 2000-2002 car is little more than a 12 year old banger. The only thing that stops me getting a newer Previa is that they are significantly smaller and have all sorts of computers and other wizzardry which makes then more tricky.

That only leaves middle class types (like my Dad) who buy a new car for cash every 10-11 years and factor in the depreciation over the course of its life. Not a bad idea since you know the history of the car and you benefit from servicing the car well since anything you repair is enjoyed by you for the life of the car. Unfortunately however these people tend to keep the car until they face an unnacceptable large and uneconomic bill for repair and they USUALLY find this out when the MOT is due. At that point they make a decision to stop throwing money at it. But for this scheme, the car needs to have an MOT to qualify and I think you'll be hard pressed to find any car with a full or nearly full MOT for less than £400, since the MOT alone is £50. That means the gain is £1600 max and some of that will be eaten away by the dealer/manufacturer raising their price by £1000 before discounting it again.

The way to stimulate the car industry is have copious amounts of insanely cheap credit for the live-for-today muppets out there to buy a flash car beyond their natural means. Unfortunately that has been tried and it has nasty after effects.

That's a good analysis, - SON (to bowdlerise Max Bygraves) ;)

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I guess this scheme is aimed at the likes of me.

Renault scenic brought new 9 years ago.However as it has only done 50K

and has always been serviced probably good for another 5 years.

The government is basically asking me to invest 10k + in the motor industry,

the catch being i will certainly loose all my money.

BS

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I was in Germany over Easter, where a similar scheme has been operating for the past few months. The government there deceitfully calls it an "environmental premium" while everyone else calls it the "scrap car premium".

It's had a good take-up, and the government are hailing its success because of this and are extending it.

On the other hand:

Lots of perfectly serviceable cars have been scrapped.

The price of scrap metal has plummeted and the scrap yards are overwhelmed.

Car service garages are going bankrupt due to lack of service / MOT work.

It's really expensive, and there are numerous loop-holes for fiddling it.

It does sod-all for the environment.

And who's going to buy a new car next year?

It was a populist / stupid idea for Germany and is even more stupid for the UK, since we import most of our cars.

Edit: Oh yes, and it also encourages people to get even more deeply into debt.

Edit: And it's deeply unfair. Why should people who don't drive subsidize car buyers and producers?

Edit: Did I mention the bureaucratic expense of administering and policing the scheme?

Edited by snowflux
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Hi all,

I own a car over 10 years old. It is only a 950cc diahatsu 'move'. My husband has a lovely 4 year old car. I can well afford a newer model, or to buy one outright but I just love driving old bangers! I only use it to take the kiddies to school and do a bit of shopping. It will probably get through the mot again next year and Im hanging on to it.

Even though I can afford a new one I wouldnt buy one for the following reasons:

1. Depreciation

2. Hippy/crusty appeal - I love it when people laugh at me in my rare looking car...they think I'm poor and then they see my mansion ;)

3. I don't care if the kids bang the doors into other newer cars or walls etc

4. Who cares it there is scrape marks on the car - infact I only wash it before the MOT each year.

5. Kids wreck the inside of your car and mine is a rubbish dump and I don't care

6. I get a full tank of petrol for £20, the tax and insurance is dirt cheap.

I love my move.......... my husband refuses to drive it - but sometimes when forced to he does and it is soooo funny watching his humiliation!!!

Edited by roland_hill
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Guest Skinty

Good posts.

So we can conclude that basically it's a high profile scheme that looks like the government is doing something but in reality won't actually be used and won't really cost as much money as you'd immediately think as a result.

They couldn't stand up yesterday and say that they are avoiding making the necessary cuts in order to cope with the debt and that they don't have any more money to play around with. So instead they came out with schemes such as this that make no difference.

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Ok how about giving me some direct advice.

At the moment I drive a 97 yes thats 97 Mazda 323 fast comming up to 100k millage. I am planning to buy a BMW 3 series around 2005 with less than 50k on the mileage.

Will I pay more for this car because of the car scrappage scheme? Is it better to buy the car sooner beofre the scheme comes around properly?

Edited by LondonToManchester
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Quite.

The scheme is a joke, and should not have been implemented at all. Mostly, I'm annoyed as my tax money will be going out of the country.

I suppose we have to wait for the full clarification...

Lord Mandelson was not at all keen on the idea when it was suggested to him on BBC radio back in January.

What are they going to do when the scheme does not work? Get out the old British Leyland tooling and issue everyone with a Hybrid version of the Austin Allegro.

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Guest Skinty
1. Depreciation

2. Hippy/crusty appeal - I love it when people laugh at me in my rare looking car...they think I'm poor and then they see my mansion ;)

3. I don't care if the kids bang the doors into other newer cars or walls etc

4. Who cares it there is scrape marks on the car - infact I only wash it before the MOT each year.

5. Kids wreck the inside of your car and mine is a rubbish dump and I don't care

6. I get a full tank of petrol for £20, the tax and insurance is dirt cheap.

I can understand that! My partner and I drove a terrible proton persona when we had to commute to work along the A1. Everyone else drove sports cars, luxury saloons and chelsea tractors. It was our way of affirming our abstinance from the consumerist debt culture. We never washed the car in the three years that we lived in these type of areas. I remember one snowy morning I scraped "I [heart symbol] U" on the top of the roof into the ice and then realised that I had scratched it into the paintwork. My partner joked that the car had just lost £50 of its value! The great thing was when people would try cutting us up in their large urban 4x4's. They would just expect us to get out of their way when they tried joining our lane. When they realised we weren't going to do that they would give up at the last second so they could avoid scraping their really expensive vehicle against an old banger.

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Ok how about giving me some direct advice.

At the moment I drive a 97 yes thats 97 Mazda 323 fast comming up to 100k millage. I am planning to buy a BMW 3 series around 2005 with less than 50k on the mileage.

Will I pay more for this car because of the car scrappage scheme? Is it better to buy the car sooner beofre the scheme comes around properly?

Given that the scrappage scheme is limited to £300mio, it is highly unlikely to affect the car you intend to buy. What could be affected is those cars that are pre-registered and effectively new but cant be included in the scheme as they are not considered new under the scheme ( as they are registered). Example:

Hyundai I10 brand new with Auto box £8495 less £2000 = £6495

Hyundai I10 pre-reg with Auto box £7495 less £0 = £7495 What would you buy? So it follows that the pre-reg car will fall to around the same level give or take.

So Pre-reg or 6 month old cars will likely take a partial hit to their values, but the knock on effect will be very diluted once you reach cars that are 3 or 4 years old.

All in my humble opinion of course.

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Hi all,

I own a car over 10 years old. It is only a 950cc diahatsu 'move'. My husband has a lovely 4 year old car. I can well afford a newer model, or to buy one outright but I just love driving old bangers! I only use it to take the kiddies to school and do a bit of shopping. It will probably get through the mot again next year and Im hanging on to it.

Even though I can afford a new one I wouldnt buy one for the following reasons:

1. Depreciation

2. Hippy/crusty appeal - I love it when people laugh at me in my rare looking car...they think I'm poor and then they see my mansion ;)

3. I don't care if the kids bang the doors into other newer cars or walls etc

4. Who cares it there is scrape marks on the car - infact I only wash it before the MOT each year.

5. Kids wreck the inside of your car and mine is a rubbish dump and I don't care

6. I get a full tank of petrol for £20, the tax and insurance is dirt cheap.

I love my move.......... my husband refuses to drive it - but sometimes when forced to he does and it is soooo funny watching his humiliation!!!

:lol::lol::lol:

Sounds like me and my skoda. My fella used to be into cars but I made him sell his golf because the service and repair bills were rediculous. We got an 02 Skoda Labia ......I mean Fabia instead and it's brilliant. Cheap to run, avg 55 ish mpg. He was really embarrassed too when we got it, but even he now sees the point in driving this type of car and dare I say quite enjoys driving it now. Personally I'd really embarrassed if I had to drive one of those big pumped-up 4wd or those really crass american type suv's with the enormous grills. Really hate range rovers too. It's like an embarrasingly overt show of wealth, they just don;t see they look like total plonkers. I can't even say I'm jelous, I just don't get off on material stuff.

Needless to say, I'm appalled at the proposed scrappage scheme, once again government trying to keep afloat another unsustainable industry. I think it's time we moved on as a nation and invested in R&D for future more sustainable technologies. Surely we can do better than petrol engines?

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Last night my brother was trying to claim there were very few cars older than 10 years on the road for this scheme to make much of a difference.

I disagreed about the numbers of cars over 10 years old but wasn't sure. A quick check this morning, although old data, and maybe over 25%.

The latest figures suggest that over a quarter of the 27 million cars on British roads are over 10 years old.

mycarcheck.com - 13th February, 2007

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The great thing was when people would try cutting us up in their large urban 4x4's. They would just expect us to get out of their way when they tried joining our lane. When they realised we weren't going to do that they would give up at the last second so they could avoid scraping their really expensive vehicle against an old banger.

oh yes, I should have mentioned this perk too! Most people who drive my type of car are 70 years or older. Other road users expect me to be slow and try miserably to pull out infront of me at junctions, changing lanes on the motorway etc then they realise my 'move' is a nifty wee thing, they retreat for the fear of damage to their expensive model! Power to the bangers!!

:lol::lol::lol:

Really hate range rovers too. It's like an embarrasingly overt show of wealth, they just don;t see they look like total plonkers. I can't even say I'm jelous, I just don't get off on material stuff.

yes, the problem with range rovers etc is that they are too wide for most roads and parking spaces, totally unpractical..... I love it when you see them struggling to get into a parking space when I just whip my 'move' right in there, as the kids open the back door straight into a bmw in the next space... ooops ;)

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I doubt it will have any effect as (as you indicated) it will have no effect anyway. If it did work you could argue that supply and demand squeeze on second hand cars would mean 9 year old cars would become more expensive bumping up the price of 8yr old cars etc.

However, who in the right mind is going to sell there perfectly functional family estate with less than 100k on the clock that still does 45mpg to get £2k off a £16k car that'll be worth £4k less as soon as you drive it off the forecourt.

What the f***wits also seem to have overlooked is anyone driving a 10 year old car probably has a sense of thrift and would be the lass person to indulge in a new car

This would have my reaction too, but I've seen it in practice in Germany. OK, their terms are a little more generous: EUR 2500 vs GBP 2000, 9 years vs 10 years, but you may still be surprised:

1) Don't underestimate the hypnotic effect on the gullible public when they are offered £2000 of free money for a new car. (Even if they don't especially want one, it'll depreciate like crazy and they'll end up even deeper in debt.)

2) Mr. New-Car-Every-Two-Years thinks: Yes! Wife/brother/cousin/neighbour trades in (11-year) old banger for new car, gets £2000, "gives" car to me; I sell 2-year old car and buy them another (9-year) old banger.

Edited by snowflux
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The great thing was when people would try cutting us up in their large urban 4x4's. They would just expect us to get out of their way when they tried joining our lane. When they realised we weren't going to do that they would give up at the last second so they could avoid scraping their really expensive vehicle against an old banger.

oh yes, I should have mentioned this perk too! Most people who drive my type of car are 70 years or older. Other road users expect me to be slow and try miserably to pull out infront of me at junctions, changing lanes on the motorway etc then they realise my 'move' is a nifty wee thing, they retreat for the fear of damage to their expensive model! Power to the bangers!!

:lol::lol::lol:

Really hate range rovers too. It's like an embarrasingly overt show of wealth, they just don;t see they look like total plonkers. I can't even say I'm jelous, I just don't get off on material stuff.

yes, the problem with range rovers etc is that they are too wide for most roads and parking spaces, totally unpractical..... I love it when you see them struggling to get into a parking space when I just whip my 'move' right in there, as the kids open the back door straight into a bmw in the next space... ooops ;)

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The program in Germany has been very successful.

Q1 volumes are up on projections, and significantly so, the only issue being that, as I mentioned elsewhere, product mix was poor, in that the smaller, less profitable vehicles made up the majority of the additional sales, the Fiesta being a notable example.

Well the program is slightly more generous in Germany, and Germany is different to the UK, there is still a sold manufacturing base and they do manufacture many vehicles. The Germans know this and they do see this money as going back into the German economy in some way. They do value direct and indirect subsidy of the manufacturing industry.

I don’t know if it will have any significant effect on growth or industry in Germany, I'll let others comment on this.

However, the commentators on this forum are a self selecting group, and don't represent the views of the majority of the British public, as you all know. Don't underestimate the impact it will have here, it'll not be as successful as the German program in it's current form, but it will have an impact and it will lead to increased vehicle sales.

And expect the program to be extended and to be fully government funded.

I am delighted that my rusty L reg polo has gone up in value by £1400 from what I paid for it 18 months ago! ;) We use it as a run around and will probably use the scrappage scheme to get £2k of a cheap to run small fuel efficient new car.

QFT

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Hi all,

I own a car over 10 years old. It is only a 950cc diahatsu 'move'. My husband has a lovely 4 year old car. I can well afford a newer model, or to buy one outright but I just love driving old bangers! I only use it to take the kiddies to school and do a bit of shopping. It will probably get through the mot again next year and Im hanging on to it.

Even though I can afford a new one I wouldnt buy one for the following reasons:

1. Depreciation

2. Hippy/crusty appeal - I love it when people laugh at me in my rare looking car...they think I'm poor and then they see my mansion ;)

3. I don't care if the kids bang the doors into other newer cars or walls etc

4. Who cares it there is scrape marks on the car - infact I only wash it before the MOT each year.

5. Kids wreck the inside of your car and mine is a rubbish dump and I don't care

6. I get a full tank of petrol for £20, the tax and insurance is dirt cheap.

I love my move.......... my husband refuses to drive it - but sometimes when forced to he does and it is soooo funny watching his humiliation!!!

I currently own a 12 year old car and this scheme does not appeal at all. Like the poster above i could afford to buy a brand new car outright but choose not to.

After having some bad experiences with my last car (5 years old) i decided to buy my current car for under £400 as a cheap runabout to get me from A-B. I dont have to worry about the car getting damaged/scratched and the car works fine for both town and motorway driving.

I have only had 1 major problem with it in 8 months which didnt cost a fortune to fix. I will upgrade cars in a year or two but i would never buy brand new from the forecourt simply due to the depreciation. I assume you have to buy brand new to qualify for this £2000 discount so it defeats the object in my opinion.

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