Friday, 12 June 2009

Buyer Beware

It transpires that the Governments car scrappage scheme, you know the one, trade your old car in, the Government gives you £1000 and the dealer gives you £1000 against a new car, ‘nobody loses, everybody wins, Rodney‘, has turned out to be a loser!

Quote from today’s ‘Times’: “Manufacturers who normally offer loans with interest rates as low as 3.9 per cent are charging customers on the scheme up to 10.4 per cent. Drivers could be better off ignoring the £2,000 grant and obtaining a more competitive finance deal after selling their old car separately, according to a study by Parker’s car price guide.”

For example, selected Seat models are being offered with 0 per cent finance outside the scheme, but if you apply for the grant, 8.5 per cent is what you will be charged.

Manufacturers were unhappy with having to fund half of the scrappage grant, and I for one don’t blame them. They see this as an opportunity to get their money back.

The Society of Motor Manufacturers and Traders said: “Unlike most European scrappage schemes, which are entirely funded by government, the UK scheme demands an industry contribution of £1,000 to match the Government’s own input.
In some cases, where manufacturer profit margins are low, they are not able to offer additional incentives which may still be available on non-scrappage models and this may be reflected in the finance arrangements.”

That’s another fine mess you’ve gotten us into, Gordon!

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