Motoring News

Cash for bangers fuels November car sales

Filed under: Motor industry — Alan @ 9:06 am

Last month new car registrations increased by over 57% as buyers took advantage of the cash for bangers scheme and the now lowered VAT rate.

The scrappage scheme will end when funding runs out of at the close of February.  So far it has been used on 21.6% of about 160,000 vehicles that were registered in November.  This is over 50% more than in November of 2008.

Society of Motor Manufacturers and Traders (SMMT) chief executive Paul Everitt stated that the car registration increase shows that the incentive scheme has been successful with customers.

The terms of the scheme allow buyers to receive a £2000 discount if they also trade in a vehicle that is ten or more years old.

Everritt estimated that the scheme has about £125m of funding left.  On Wednesday, he asked the Government to think about extending the deadline for the scheme.

However, the Business Secretary Lord Mandelson said that the industry will have to deal with normal market conditions once again, which quashed hopes among many that the scheme would be extended.

The 57% increase was a large jump over previous months such as September which had an 11% increase and August which saw only a 6% increase.

For the most part, the large increase was a result of private buyers taking advantage of the scheme.

Yet, even with the huge increase the total sales figures for November are still down by about nine percent when compared to the total sales of last year.

Motor industry wants scrappage extension

Filed under: Motor industry — Alan @ 8:40 am

The flagging motor industry is talking with the Government in hopes that they can get the scrappage scheme continued into February 2010, a task that would require about £150m more from Mr Browns pocket.

The scheme was started on May 18th, at which point the Government said it would run into February or until their funding ran out, which is expected to happen sometime between the end of October or the beginning of November.

The Government has already pledged £300m for the scheme.
The SMMT is afraid that new legislation that requires higher first year Vehicle Excise Duty rates on all vehicles with larger engines, starting in April of next year, will stop consumers from purchasing new cars, which the extended scrappage scheme could help.

According to the SMMT, the scrappage scheme has already been able to produce growth in the auto sector, after 15 months of declining sales reports in the marketplace for new cars.

To date over 100,000 cars have been bought with the scrappage scheme, and an additional back order of over 100,000 is banked.