There have been mixed views about the recent scrappage scheme introduced by the chancellor within the Budget this week. However the AA has published their Deals For New Wheels press release supporting the scheme, that will not only induce new car sales but may also help the environment also, with newer cars replacing older cars.
The basis of the scheme is that the Government and manufacturer will give you £2000 off a new car, if you trade in a car over the age of 10 year old of which you have owned for at least 12 months. The criticism has come from used car dealerships and other car selling factors such as car lease firms. It is clearly aimed at the new car buyer, ignoring those who would normally buy every 2 or 3 years and only focusing on those with very old cars, whom you would assume would not normally buy a new car.
It has been popular in Germany and other countries, so it is hard to be negative about certain aspects of the scheme. The AA publishes that 10 million cars may be eligible for the scheme, but this is thwarted by the fact that only £300m has been put aside for this and only for 12 months, not longer as other countries have done, this equates to only 300,000 cars, way short of estimates.
There is criticism that a fuel levy has been applied to pay for the scheme and many believe the increased VAT levy’s would have paid for itself anyway. There is a more detailed facts about the Budget, which you can read form the official AA press release.