Friday, February 6, 2009

Bailout for the environment

Drivers could be paid to trade in gas-guzzlers

Ministers are actively considering a "scrappage" incentive scheme, similar to those already introduced in a number of European Union countries. Motorists could receive cash payments from the Government of up to £2,000 to trade in their old gas guzzler for a new eco-friendly model, says Mandy. It would be introduced as an emergency measure during the recession, and would have the additional benefit of helping the industry to reach the Government's green targets. In Germany, where drivers receive 2,500 euros (£2,325) to trade in cars older than nine years, hundreds of thousands of extra car sales are expected as a direct result of the scrappage scheme.

Posted by mountain goat @ 09:23 AM (951 views)
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10 thoughts on “Bailout for the environment

  • Paying money for someone to get rid of something that’s in working order has to be the most economically (paying car-makers money to keep production at bubble capacity) and environmentally damaging (given the energy and material costs of producing new cars for the sake of it) proposal I can think of. Besides, is there anyone in this country now that has a car older than two years?? (obviously there are – just exaggerating a bit, but there can’t be many old bangers out there – even I traded in my nine year old car a few months ago – got some funny looks at the dealers for keeping the same car for seven years)

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  • mountain goat says:

    My campervan was built in 1983 so in that case the environment might actually improve lol

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  • Will this raise the price of older cars, i.e. if I am going to buy a new car and get rid of my 2 year old one, can I buy a banger on the 2nd hand market for $100 and then trade it in? Does this apply across all the EU countries?

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  • stillthinking says:

    This is in effect in Japan, although a slightly different method. The equivalent of the MOT is so expensive and onerous after 4/5 years(can’t remember the exact years) that the price and future effort of MOTs becomes similar to buying a new car, so cars are typically used for 5 years. There is an side effect to this, the second-hand value for these relatively not so old cars is pushed down, and if you are foreign, you are allowed to export your own car home (just one).
    So there are enterprising Australians always on the look out for a document source (any australian english teacher basically) to enable them to export a luxury car which then immediately sells for more in Australia, which lacks the regulations. Very good money apparently.

    Certainly this won’t raise the values used cars, because there would of necessity need to be an aspect of compulsion to the scheme. I did think about cars before because I live next to used car showroom (cheap end) which has been dead for months now, and I wondered when, given a price collapse in the UK, people are going to work out that they can buy cars from bankrupt Britain, convert them to left hand drive, and sell them profitably to the more funded continent.
    Our export trade isn’t dead….

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  • I Want A House says:

    Money… Money… Money… What really is money… Hell, give them the inheritence of the children’s children… Britain’s policies are mental!

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  • stillthinking says:

    Probably you can remember the hooha about draconian vehicle duty increases, which resulted in a catastrophic downturn in used prices. Used prices definitely won’t increase from any government directive to stop using them.

    http://news.bbc.co.uk/2/hi/programmes/newsnight/4830164.stm

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  • Can I get money to trade in my non-existent car for a new non-existent one… or just get free public transport instead please?
    £2K would cover my annual travel
    …or maybe I should buy an old banger to trade in now, sounds like a good arbitrage to me!
    (matt_the_hat – yes it would.)

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  • Why not invest the money this would cost in R&D for greener alternatives and create more jobs? Or invest it in public transport instead? If they scrap the gas guzzlers, Phd is right, the effect on the environment from all the manufacturing required to make the new ones, as well as get rid of the old ones would be horrific. And if dealers sell them on then they’re still guzzling gas. This is trying to create trade where there is none – like trying to base an economy on housing. They are trying to squeeze every last bit of air into the bubble.

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  • Great, I will be able to scrap my old 106 and get a Range Rover Sport

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  • notaneconomicsguru says:

    This is mad they’ll clutch at any old straw to tray to get consumers spending again and I just don’t think its going to work. Sorry I just won’t be taking them up on this one.

    Now they have successfully trashed both equity and savings growth, I and probably many others with little or no debt other than a modest mortgage, and only a handful of years to run are now left having to to throw all available cash at substantial investment shortfalls in both my pension and endowment investments. These need to grow at 5- 6% a year to meet targets, so as equities are either negatively growing or too riskly and cash essentially zero, I now find that in order to maintain parity with where I was only a few months ago, I am left with far less i.e.almost no disposable income.

    A new car to replace my almost 8 year old one which is in any case worth 2 to 3 tiimes the £2k they might offer? That was not on the cards before. In the current climate, it probably never ever will be.

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