Car scrappage schemes have failed to take off – here’s why


The motor industry is in a sorry state of affairs right now.

New car sales have plummeted, concerns for UK manufacturing continue to course through its veins in preparation for Brexit and bans on diesel use in Germany and increased taxation for the fuel type have motorists – especially those with oil burners – worried.

In a bid to get buyers back into showrooms, mainstream brands have launched scrappage schemes offering discounts on new models when owners trade-in their older vehicles. But they’ve done little to reinvigorate activity – and here’s why…

No deal: New research suggests motorists haven't been turned on to manufacturer-offered scrappage schemes that have attempted to revitalise the motor industry 

No deal: New research suggests motorists haven't been turned on to manufacturer-offered scrappage schemes that have attempted to revitalise the motor industry 

No deal: New research suggests motorists haven’t been turned on to manufacturer-offered scrappage schemes that have attempted to revitalise the motor industry 

Scrappage schemes are not a new thing for the motor sector.

In 2009 to 2010, the government pumped £400 million of taxpayers’ money into a state-sponsored scheme, offering big savings on new cars if drivers were willing to part with their old bangers.

It was a huge success, with 396,000 new car sales generated, pumping new life into the beleaguered motor trade following the financial crisis.

But with the government unwilling to make the same scale of investment in a similar scheme to help falling sales this time around, car manufacturers took it into their own hands to launch a variety of scrappage deals that ran during 2017 and have since been extended in this year.

You can find out more about all of the offers still available until the end of March in our dedicated Scrappage Scheme guide.

But it seems these deals have done little to excite buyers.

THE BIGGEST SAVINGS ON NEW MODELS IF YOU USE A SCRAPPAGE SCHEME 
Car OTR Price Scrappage Allowance Extra discount* BuyaCar price Total saving
Volkswagen Passat 1.4 TSI GTE 4dr DSG Saloon £37,430 £6,000 £5,082 £26,348 £11,082
Audi Q7 3.0 TDI 258 Quattro e-tron 5dr Tip Auto estate £67,550 £8,000 £2,983 £56,567 £10,983
Audi A3 1.4 TFSI e-tron 5dr S Tronic sportback £36,455 £5,000 £5,002 £26,453 £10,002
Volkswagen e-Golf 5dr Auto £32,730 £5,500 £4,500 £22,730 £10,000
Volkswagen Sharan 2.0 TDI CR BlueMotion Tech 150 SE 5dr £32,070 £6,000 £3,547 £22,523 £9,547
Volkswagen E-Up 5dr Auto £25,640 £3,300 £4,500 £17,840 £7,800
Ford Focus 1.0 EcoBoost 125 Titanium Navigation 5dr hatchback £22,035 £4,950 £2,630 £14,455 £7,580
Skoda Superb 1.4 TSI 150 SE 5dr hatchback £23,245 £4,000 £3,006 £16,239 £7,006
Volkswagen Tiguan 2.0 TDi BMT 150 SE 5dr £28,140 £4,000 £2,979 £21,161 £6,979
Skoda Octavia 1.0 TSI SE 5dr £19,000 £3,500 £2,372 £13,128 £5,872
*Includes Government grant for Plug-in Vehicles     

According to new research by BuyaCar.co.uk, a combination of consumer scepticism and confusion over whether the schemes offer the best value, restrictive eligibility criteria and lack of awareness have seen many motorists keep hold of the cars they already own.

Unlike the government-backed scrappage scheme, which offered consumers a standard £2,000 for an old car traded against a new model, the manufacturers’ schemes available now each have different restrictions and discounts.

If you are going to use one by the end of the month, do your research, because you’ll not find two the same.

Of 1,300 car buyers polled by the motor purchasing site, just 23 – less than two per cent – had bought a car using one of the current scrappage schemes.

More than 40 per cent of those questioned said their existing car would not qualify to take advantage of the deals offered by car brands, which will only take certain vehicles of particular ages, mainly pre Euro5 vehicles – petrol and diesel – registered before 2010.

In some cases you also need to have owned the car you want to trade in for at least six months, though some request an ownership period of just 60 days.

Another 18 per cent who did own eligible vehicles said they opted against the deals because they found they could get a better deal by not going down the manufacturer-offered scrappage route. 

That comes as little shock. Strict policy wording on some of the brands’ websites declare the scrappage deals are not eligible alongside other discounts, and sales staff are likely reluctant to budge on fees because ‘hey, you’re already making a saving’, as the salesman will try to convince you.

But the surprise finding of the study was that 479 people – nearly four in ten – who have bought a car since the schemes were available had no idea they were on offer.

Almost two in five car buyers said they were unaware the auto makers were offering schemes

Almost two in five car buyers said they were unaware the auto makers were offering schemes

Almost two in five car buyers said they were unaware the auto makers were offering schemes

Austin Collins, Managing Director of BuyaCar.co.uk, said: ‘Manufacturers’ marketing departments might be disappointed to learn that 37 per cent of their target customers have failed to pick up on the existence of scrappage schemes.

‘But the reality is that the industry should not be too disappointed that customers are apparently underwhelmed by the latest scrappage-related offers because it is actually more likely to be a sign that cars are already perceived as affordable under existing deal structures.

‘Perhaps it was a mistake also to use the same terminology for myriad different offers from multiple manufacturer brands as the government-backed scheme of nine years ago.

‘Whatever the reasons for the low key interest of motorists in the latest scrappage schemes it seems they are unlikely to create the same kind of buying surge that we saw in 2009/10.’ 

This is Money's Rob Hull says the recent negativity surrounding 

This is Money's Rob Hull says the recent negativity surrounding 

This is Money’s Rob Hull says the recent negativity surrounding 

But perhaps the real reason scrappage schemes haven’t worked is… 

I agree with most of Austin’s comments, other than the claim that new cars are already perceived as affordable under current offers.

Surely for a scrappage scheme to be worthwhile it needs to improve the existing deal structure, not be limited by it.

But furthermore, I think that fewer people actually want to buy a new car at the moment, which is backed up by figures that show a stall in registrations since last April.

Motorists simply don’t want to take up any car-buying incentives right now, which is the main reason why scrappage schemes have bombed thus far.

And it’s pretty obvious what’s keeping motorists out of dealerships. 

Almost half of new car buyers – traditionally – want diesel in the UK. They’re cheaper to run over long distances, were less expensive to tax until the government turned VED rates into something like a mental test in a Crystal Maze task, and are better for the environment with lower CO2 outputs than petrol. Electric cars make up a grain of total sales in this country as we currently stand, so forget them for now.

With so much negativity currently surrounding diesel, drivers are understandably unwilling to make purchases when vehicles don’t have a secured future value. 

And with brands like Porsche axing the fuel type, German cities and Rome announcing potential bans on them and a continuous stream of attacks by environmental groups, ministers and people who fail to acknowledge how clean the latest engines are all in recent weeks, the vulnerability of diesel values becomes a real worry.

It’s unsurprising then that not many people are willing to spend £20,000-plus on a car while the sector is so unstable.

Poll

What will fuel the next car you buy?

  • Diesel



    5838 votes
  • Petrol



    5781 votes
  • Hybrid



    2055 votes
  • Electric



    1068 votes

Some of the scrappage schemes, like those offered by Peugeot, Citroen and DS, are even offering bigger discounts on a diesel powered model than the exact same car powered by a petrol engine. It all stinks of desperation to me. 

As this new research has highlighted, the scrappage schemes offered today aren’t particularly good deals for customers, and until there’s something better in place to help the nation’s drivers finance a costly switch to petrol or alternative fuel vehicles, it isn’t going to improve any time soon.

If the government is really serious about trying to remove heavily polluting ‘older’ cars from our roads, it needs to put its hands in its pockets instead of deflecting the responsibility to manufacturers who care more about their sales figures than the level of our country’s air pollution – as VW proved not too long ago.

What motorists have been left with in the time being is a set of low-value offers masquerading as attempt to help the nation achieve its emissions targets by driving out dirtier, older vehicles. But as a result of these feeble discounts, what they’ve done is encouraged many people to keep hold of these vehicles for longer.

We were told over seven months ago that there would be a ban on the sale of new petrol and diesel cars in 2040, but since July we haven’t heard a peep from those in charge about how the transition to electric power will be made viable for consumers.

What we really need is some transparency about what the future holds for diesel – and petrol. 

Once motorists have this clarity they will start considering buying new cars again, and if well incentivised, the ones ministers want us to own.

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