Carmakers urge scrappage renewal

stumuz · Post by **stumuz** » 17 Sep 2009, 08:42

Don’t know if it’s relevant to the discussion, but a reason for the increase in price of second hand cars could be the credit crunch.

The availability of cheap credit is a factor in second hand goods, for example a new day fishing boat will set you back about 45K. My budget for a fishing boat has been in the region of £700-800! However, I decided to literally’ push the boat out’ and up the budget to 1K about four years ago.

Trying to get a decent boat for the 1K proved difficult because most boat sellers were offering new boats with easy credit or the old boat was being traded in for the new boat and probably scrapped.

Now the 1K boat is 3-4K because there is no credit available, fewer people seem prepared to shell out 45K for a new one. So to conclude this ramble! If more people cannot get or are not offered credit, they must pay cash. As a considerable amount of people are either at or just above minimum wage that will push the price of the cheaper cars up. So the amount of cars available will have some affect on price, but so will be the withdrawal of credit, which a lot of people have been living on to subsidise their wages.

RenewableCandy · Post by **RenewableCandy** » 17 Sep 2009, 12:00

Good point and my post saying the olde cars are probably worth a bit more because people are beginning to look after them better (as a result of wanting to put off buying a replacement) seems to have been lost in the ether.

Interestingly, we've noticed our olde crate here at Chateau Renewable is doing a better mpg than of yore, perhaps it's because my other 1/2 now cycles to work (3 miles) instead of driving (and before you say wot a sissy, bear in mind that giving up driving to work, in this case, involves never driving: car-parking permits are issued by the year, and day-rates are extortionate) yeah think fog, sleet, wind, The Races, he has to cope with it all!

Anyway this means the only drives we do are occasional long ones, in which the engine has time to warm up and properly get into the swing of things.

PS_RalphW · Post by **PS_RalphW** » 17 Sep 2009, 12:32

In a recession things like servicing get put off as a less urgent bill than paying the rent. I would make a good guess that second hand cars are now in worse average condition. Of course, in the long run this may change, but I doubt it.

RenewableCandy · Post by **RenewableCandy** » 17 Sep 2009, 12:43

Sozz I just found my lost post it's on another thread (d'uh!). Putting off servicing for lack of cash, blimey is that what mostorizts do?? Even if their wheels are their only way of getting to work (I'm assuming a lot of the people who are out of work just pack in car ownership altogether or is that just naiive?)?

Perhaps I'm just weird. Perhaps???

madibe · Post by **madibe** » 17 Sep 2009, 14:05

I'm assuming a lot of the people who are out of work just pack in car ownership altogether or is that just naiive?

Na - just drive without Tax, Mot, Insurance.

Seriously, if you live rural then without a car you cant even get to a job interview!

fifthcolumn · Post by **fifthcolumn** » 18 Sep 2009, 23:06

Quintus wrote: Talking of things crazy, how does any of the maths add up?

Gross income tax receipts = £140.5 billion
Social security benefits (2013/14) = £193.4 billion
Total spending on NHS in England = £107 billion.
Paying interest debts = £63.4 billion
Ministry of Defence = £36.7 billion
It's missing other sources of tax. Corporate tax brings in about 250 billion.

The size of the UK economy is about a trillion pounds (1000 billion) and total tax receipts are somewhere on the order of 450 billion.

fifthcolumn · Post by **fifthcolumn** » 18 Sep 2009, 23:07

maudibe wrote: Seriously, if you live rural then without a car you cant even get to a job interview!

Another reason to point out that peak oil will have to be solved in the cities if we don't get mass uptake of electric cars because many rural jobs just won't be feasible.

SunnyJim · Post by **SunnyJim** » 19 Sep 2009, 08:43

Not if peak oil revives a countryside economy. It won't be necessary to travel to cities to work. In fact unless we can continue to import food with our weak currency and massive debts, we may see a reversal of the flow of people into the cities.

Quintus · Post by **Quintus** » 20 Sep 2009, 20:36

The scrappage scheme will probably be renewed if it really is a steady little earner for the Treasury:

Scrappage tax nets profit for Treasury

The cash for bangers scheme is set to earn the Treasury a major windfall, The Daily Telegraph has learned.

Initial industry estimates suggest the Government will make at least £100m profit out of the scheme ... This is because the amount of VAT the Government recoups on many of the deals is greater than the £1,000 subsidy it gives to the owner of a 10-year-old car to buy a new model.

With VAT currently at 15pc, the Treasury is in profit whenever a scrappage customer pays more than £7,600 for a car including tax. According to the motor industry the average price of cars bought under the scheme has been £9,000.

http://www.telegraph.co.uk/finance/news ... asury.html

PS_RalphW · Post by **PS_RalphW** » 28 Sep 2009, 12:58

BBC are reporting that the scheme is to be extended. (no link yet).

The original stock of older vehicles that their owners planned to replace must have long since been crushed. The price of second hand cars has risen sharply, yet new vehicle production is still down 30% yoy.

This scheme is subsidising consumption of cars for the sake of consumption.

madibe · Post by **madibe** » 28 Sep 2009, 23:15

Here it is...

http://news.bbc.co.uk/1/hi/uk_politics/8278679.stm

Blue Peter · Post by **Blue Peter** » 29 Sep 2009, 09:43

And Stephanie Flanders has some calculation of what it amounts to (and a comparison with Germany):

Consider the arithmetic. The UK now plans to spend another £100m on its scrappage scheme, bringing the grand total to £400m. That sounds exciting until you hear that Germany's scheme cost 5bn euros (£4.6bn). In other words, more than ten times as much. Under the German scheme, the government provided a rebate of 2,500 euros to everyone exchanging an old car for a new one. Two million Germans have bought cars under the scheme - compared to 227,000 so far in the UK scheme.

Flanders

Peter.

biffvernon · Post by **biffvernon** » 29 Sep 2009, 12:11

And didn't the labour delegates cheer when Mandy announced the extra £100m - most of which will go to overseas manufacturers and most of the new cars bought under the scheme won't be the low-emmission models that attract the £35 car tax.

Stupid.

RenewableCandy · Post by **RenewableCandy** » 29 Sep 2009, 23:41

I'd like to propose a wind-turbine scrappage scheme...

biffvernon · Post by **biffvernon** » 30 Sep 2009, 20:42

RenewableCandy wrote:I'd like to propose a wind-turbine scrappage scheme...

I've spent all day thinking about the implications of that.