Car Scrappage Scheme Good for Economy
Posted on September 25, 2009
Filed Under News |
The latest news suggests that us car buyers are not the only one to benefit from the car scrappage scheme - both the government and the economy have directly benefited.
Reports suggest that the government will make at least £100 million from the scheme, even with its initial outlays to people who’ve scrapped their old clunker for cash towards a new car. This money has come from the 20% boost in sales and consequent increase in VAT receipts.
The government is not the only one to benefit, car manufacturers are seeing a general increase in the sales of new cars which means less redundancies and layoffs in the car manufacturing industry. Again, good news for a lot of people and the economy as a whole.
All this has led to increased calls for the Government to extend the scrappage scheme past its financial and calendar deadlines. A call that, at the moment, is being resisted - so time may be running out if you want to get cash for your old car!
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One Response to “Car Scrappage Scheme Good for Economy”
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I read that to date approx 261,000 cars have been scrapped in the governments scrappage scheme and that when it ends early in the new year around 400,000 ‘bangers’ will have been removed from British roads.
The scheme is heralded as a great success. But who has benefitted, ok so a few car dealerships have been saved from closure, well maybe until next year. The main winners are overseas car manufactures especially in countries like Korea with makes like Kia and Hyundia doing very niceley.
However this short sighted policy didn’t in many cases get rid of old bangers. The cars that were often scrapped were perfectly good cars often with very modest mileages. These cars would have provided work for independant garages throughout Great Britain. My industry known as the ‘aftermarket’ supplies parts for these garages and now a huge part of our income has been snatched away for some short term gain. For the next 3 years none of these cars will require an annual MOT so the goverment will not get 3 years of fee’s. 400,000 times 3 = 1,200,000. I’m not sure how much of the MOT fee charged by each garage goes to the DVLA but you can see how the sums are adding up. As the replacement new cars are likely to need very few components in their next 3 years this is going to decimate the aftermarket parts business’s. Will the goverment be compensating our industry? Don’t hold your breath.
The ‘bangers’ that the newspapers and politicians keep refering to are still on our roads. The people who have to drive cars that are only worth three or four hundred pounds can not possibly afford to put them into the scappage scheme. They will probably have to drive round in them for a lot longer now because the cars that would have eventually come down to them have nearly all been scrapped.
This scrappage scheme will in the end cause more problems than it solves.
Rob Wilkinson
Foreign Autoparts ( Gloucester ) Ltd