The burning question of the moment is:
has the scrappage scheme worked? The media have announced that it
has been a great success as they are fed information from the
government, who clearly would not declare a failure, as have
manufacturers who obviously don’t want to show to their competitors
that they hate the scheme, which has been about as useless as this
summer so far!

The fact is that the Germans are now into their
second wedge of money while we, in the meantime, have struggled to
use up just 10 percent of our allowance. A major difference is that
German manufacturers haven’t got to dip their hands into their
pockets, unlike in the UK where manufacturers must fork out £1,000.
Also, 50 percent of the cars sold in Germany are manufactured
there, so they are, in theory at least, helping their manufacturers
as well as their retailers.

But what about the lease brokers, can’t we get in
on the act and help to save the planet by removing a few more of
what the Americans call “clunkers” off our roads? Nope! Because the
manufacturers are already giving away all of their profit in each
car (and then some more), how will they be able to subsidise a
scrappage scheme?

But then if we brokers with hippie values want to
save the bit of sky above the UK, how can we do our bit other than
try to push those driving Range Rovers into Toyota Prius as a great
sexy but friendly alternative?

Crushing disappointment

Can’t we get in on the scrappage con
(oops, I mean incentive)? The answer is, of course, that we can’t,
but then, is it really doing the job? Part of the reason for
introducing scrappage was to get rid of old bangers and, as a
result, improve the environment and make the roads safer – but
those making these decisions need to speak to dealers selling
cheapos. I spoke to an owner of a car lot, called John, who sells
cheap cars (£500 to £2,000) and asked how the scrappage scheme has
affected him.

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‘It’s a disaster,’ he replied, and what he then
said explained made sense. If a driver can afford to replace a 10
year-old car with a new one, then invariably the old car has been
well looked-after and is a source of good quality used cars for
dealers like him when normally part-exchanged, but under the rules
these cars have been crushed, and instead the old, badly
looked-after cars are having to be re-circulated, making the roads
more dangerous and emissions higher than they should be.

There will always be a demand for low-priced cars –
young mums have to fend for themselves and get their children about
and youngsters and those with a tight budget still need a set of
wheels. The scrappage scheme has removed the better-quality cheap
cars from the system and put up the cost of older cars at a time
when those needing them can ill afford it.

On reflection I think we brokers should avoid the
scrappage scheme to help the environment and help those worse off
to be able to afford a car – who knows, we may end up joining them
if Mandelson doesn’t do what he said he would do and help the car
finance industry.