Saturday, 26 September 2009

The Scrappage Scheme

Where to start! James Baggot who is a fellow Twitter user and the editor of car dealer magazine asked the question “Can anyone think of a body/person that would be against the scrap scheme being extended??” I replied that it was affecting my business and James asked me to give my views

Well here goes, in my opinion the Scrappage scheme needs to be stopped or at least radically altered, it is not creating new customers it is merely mortgaging customers from the future, in the process its taking sales from used car dealers, creating a shortage of well maintained older cars and increasing the cost of vehicles to the people who can least afford it, i.e the cheaper end of the market, first time buyers and low income users, but what I find really incomprehensible is that the cars aren’t going to be used for spares they are just going to be recycled.

It is also having a drastic effect on dealers like me who’s main source of income was previously derived from selling honest well looked after used cars priced to sell between £1000 to £3000. I have been in the motor trade for 30+ years and In my experience the people who can afford to jump from running a 10 year old car to buying a new one are also the people that could afford to keep their old car serviced, and have it maintained regardless of cost, A lot of these vehicles which were the mainstay of my business are now being scrapped.

A couple of days ago a customer came to buy a car from me it was a 72000 Miles, 97R Nissan Serena 2.3 Diesel 8 Seater for sale at £1695, he made a round trip of 572 miles, he needed the car because he had a large family and wanted the best car to fit his budget hence the distance he was prepared to travel, the car was a source of profit for me on which I will pay income tax and Vat, but to the customer it will be essential transport, however if the previous owner had bought a new car on the scheme it would have been lost forever.

Perfectly good vehicles are being scrapped even though there’s a shortage, unbelievably classic cars are being sent to the crusher, a 10 year old wreck of a car can now be worth more in part exchange than the same 8 year old low mileage good condition model, and you can buy a new car cheaper than you can buy a 12 month old one, The motor trade has finally gone mad,

I have just returned from my holiday in Sorrento and while I was there I saw a procession of 50 year old Fiat 500’s driving through the town centre, all the cars had been lovingly restored by their proud owners, wouldn’t it have been a shame if they had all been scrapped?

As an example my Mother has a mint 1997 R Ford Fiesta 1.25 Ghia it has power steering a sunroof, electric windows, 45000 Miles and Full Service History and has never given a moments trouble, She paid £2000 for it 6 years ago and it has flown through the MOT’s ever since, if she wanted to change it her choices would be as follows

1) She could buy a used car and according to (my Glass’s Guide doesn’t go back that far) could reasonably expect a part exchange value of £1220, the dealer could then choose to take another profit opportunity and retail the car themselves or sell the vehicle to the trade

2) Alternatively she could go and buy a new car on the scrappage scheme and get a £2000 allowance, her Mint Fiesta would then be no more

A couple of days ago I had the misfortune to be stuck behind another Ford Fiesta which was about 10 years old I say “about” because I couldn’t see the number plate for the clouds of oily blue smoke bellowing out of the exhaust, the body work that was visible was dented and rusty, one of the rear lights was held together with gaffa tape, the car was way beyond economic repair, if the owner delivered it to the scrap yard himself it would only be worth 30 to 70 pounds,

So why doesn’t he go and buy a new car on the scrappage scheme and get £2000 for it, “simples” he can’t afford to, so his car will continue to be an accident waiting to happen on the road, while cars like my Mums are scrapped.

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