Benefit from the Car Scrappage Scheme
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Auto buyers may find an extension to the scrappage scheme can help them save even more money. Business secretary Peter Mandelson has announced that the UKs scrappage scheme will be extended to cover an extra 100,000 cars.
He said the scheme, which started in May and gives consumers £2,000 off a new car if they trade in one at least 10 years old, was running out of money.
The initial £300 million government investment earlier this year - expected to last until March 2010 - is set to run out early next month.
In total, the countrys leaders have agreed to set aside £400 million for the programme.
So far, some 227,750 cars and vans have been ordered through the scheme, despite a mere 4% of drivers claiming they planned not to make use of the governments scrappage scheme, research by car insurance company swiftcover.com revealed earlier this year.
Business secretary Lord Peter Mandelson said the government was responding to the concerns of vehicle producers.
However, he added: "This is not a blank cheque to the auto manufacturers, but recognition that there is still a short-term challenge to boost demand and confidence in the sector."
The British car industry has campaigned hard for an extension to the scheme, which has been widely vied as modestly successful in stimulating new car sales. It was feared that next Januarys rise in VAT would have hit dealers hard, a blow that the scrappage scheme top-up should go some way to offsetting.
Over a quarter (27%) of cash-strapped drivers think that buying a new car is a waste of money, while three out of ten (29%) would rather see higher taxes on luxury vehicles to subsidise poorer drivers.
Swiftcover.com found that almost seven out of ten (69%) drivers say their motoring costs have increased in the last 12 months. 64% of drivers blame government road and fuel taxes for the higher costs and want more done to reduce the cost of motoring: in addition to taxes on luxury cars (29%), 22% of people feel commercial vehicles should pay higher taxes, and a similar number (21%) say road tax should be replaced with toll roads so people travelling more would pay more.
Although theyre not that keen on the scrappage plan, a third of motorists still believe that better tax incentives for greener cars would help reduce the cost of motoring.
Tina Shortle, marketing director of swiftcover.com, says the government needs to consider more radical measures to kick star-
the car market. She says: "Our research shows that many drivers are hurting financially, so initiatives such as the scrappage plan do little to invigorate the marketplace because they dont address the problem of affordability. Many drivers feel new cars are still too expensive or they can get better deals without the scrappage rebate."
swiftcover.coms Money Saving Motoring Survey found:
Scrappage
* 4% of people intend to use the governments scrappage scheme
* 33% would like to use the scrappage scheme, but their car is not eligible
* 27% of drivers think buying a new car is a waste of money
* 17% think they can get a better deal on a new car without the scrappage scheme
* 9% would use the scheme if it were cheaper than buying a pre-registered or nearly new car
Motoring costs
* 69% of people say their motoring costs have increased in the last 12 months
* 64% blame increases on the government for high fuel and car taxes
* 13% blame increases on petrol companies due to the high cost of fuel
* 78% believe improving public transport will reduce motoring costs
* 33% think better tax incentives for greener cars will reduce motoring costs
* 29% say there should be higher tax on luxury cars to subsidise poorer drivers
* 22% say commercial vehicles should be taxed more to subsidise private drivers
* 21% would replace road tax with toll roads, so those travelling more pay more
* 18% say that high-polluting cars should be taxed more
* 9% favour banning sports cars and 4x4s to reduce motoring costs
* 9% believe older, high-polluting cars should be compulsorily scrapped
Shortle adds: "We found that there is an appetite for greener motoring, particularly as some greener cars can help reduce motoring expenses via lower running costs and cheaper insurance rates. The government should consider other options that can cut motoring costs more significantly and encourage drivers to choose vehicles that are less harmful to the environment."
Drivers insuring green cars, such as hybrid vehicles like the Honda Insight and Toyota Prius, are exempt from the Congestion Charge and receive a 10% discount on their insurance quote with swiftcover.com.
Research was carried out amongst 872 drivers in July 2009 Source: Benefit from the Car Scrappage Scheme
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About the author
Julia Smith is a freelance writer for Swiftcover.com. Swiftcover is the UKs only 100% online motor insurance company. We offer car insurance quotes in less than 60 seconds. |
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