Was The Government Scrappage Scheme Really A Success?

It was just around a year ago that the motor industry pleaded for government help! Manufacturers were certain they’d go bust and were urgent for the government to do something about it.

The recession hit all industries small and large but nobody buying new cars meant manufacturers were in great peril. So in May of 2009 the government introduced the “car scrappage scheme”

How Did It Work?

When purchasing a new car, there was the option to trade in your current vehicle (providing it was over 10 years old) to be scrapped and in return you would then receive a 2000 pounds discount off a new car!

The idea was that it would encourage people to buy new cars and remove older (less eco friendly) cars from the road.

The government funded scheme ended last month and results have shown it proved to be very successful.

 SMMT (Society of Motor Manufacturers and Traders) recently released the final figures of the scheme which showed that almost 380,000 vehicles were sold through the initiative!

Though it may have been a success for some, it appears it may not have helped everyone.

Just over a year ago I’m sure if you looked in your local business directory, you would have found over a dozen ads such as “We Buy Cars for Scrap”.

Plenty of small business provided a scrappage service to local customers, if you look now however , there are a very limited number of adds and my guess would definitely be that the scrappage scheme did very little to help these companies.

The scrappage scheme would have made it very hard for these businesses to acquire vehicles and turn over a profit.

And I’m sure used car sales would also have been dramatically affected by the scheme.

So was it really a success?

Well although the scheme contributed to 20% of sales during its run it, it also caused used car prices to increase dramatically.

Now the scheme has come to an end, many manufacturers are providing a “swappage scheme” which is basically their own version of the government’s scrappage scheme.

At current sales of new vehicles continue to rise however it’s believed that there will be a fall in new car sales and a large rise in the sales of used vehicles.

The March 2010 official figures of sales should show the continued rise. It will be the 9th consecutive monthly rise for new car sales, previous to this continuing rise we saw 15 months of decrease.

So in conclusion, to many the government scrappage scheme was a huge success! Consumers received huge discounts on new car prices, manufactures received a massive sales increase and plenty of old eco nasty cars were sent to the crusher!

But to a number of small businesses, the scheme was nothing but a problem!  And there’s no guarantee that now the government scrappage scheme has ended vehicle sales won’t just plummet back to where they sat at the start of the scheme.

So it’s uncertain what is about to happen with the sales of new and used cars but there is bound to be a massive interest in upcoming figures!