‘But Mr Darling, you promised me £2,000?!’
Yesterday good old Alistair announced in the budget that anyone buying a new car will get a £2,000 rebate from scrapping their old car.
That really does sound amazing… until you read the small print:
1) The rebate is only available on brand new UK supplied cars
2) Actually, only £1,000 will be contributed by the government. An additional £1,000 will be donated by the manufacturer IF they choose to opt in to the scheme
3) The car being scrapped must have been registered before 1 August 1999
4) The scheme is proposed to last for just 1 year (or until funds run out!)
5) The car being scrapped must have an MOT and have been registered to the person buying the new car for at least a year
AND, HOW WILL THIS AFFECT USED CAR PRICES?
On the whole, the new scheme is unlikely to have a major impact on used car values.
Because you need to have owned the car you are scrapping for at least 12 months, people won’t be able to buy an old banger solely for the purpose of trading it in. So prices of used cars over 10 years old are only likely to increase a little.
The biggest effect will be dependent upon how successful the scheme is. If we see a 40% increase in new car purchases (like they did in Germany) it will ease the current over-demand for used cars which will hopefully stop prices rising and maybe even start them falling again. The greatest price reductions would be on cars under 3 years old.
SO, HOW DO YOU BEAT ‘AL’ IF YOU ARE BUYING A NEW CAR?
Easy. Just find someone you know with an old banger, and get them to order the new car for you. You will need to immediately re-register the new car in your name, but you can both gain a little extra cash.
Just make sure that it is someone you trust!
(Founder & Owner)