Scrappage scheme will have little impact on other used car demand

With the government confirming the initiation of the proposed vehicle scrappage scheme in its Budget, many dealers may be concerned that the decision will have a negative impact on the cost of almost-new cars.

However, Glass’s has argued that the scheme will have little impact upon the trading prices of those used cars that have only been on the market for around a year.

It had been suggested by some industry commentators that with motorists able to trade in their decade-old used cars for scrapping in return for a £2,000 discount on a new model, this would bring these prices in line with the current values of almost-new cars.

But Glass’s believe that those previously interested in buying a 12-month-old used car are not the same as motorists with a vehicle old enough to be used in the scrapping scheme.

Thus, those looking at the almost-new cars will not be eligible to take part in the scheme and so will continue to demand used cars.

Meanwhile, Adrian Rushmore, managing editor at Glass’s, added: "The scrappage scheme is likely to increase demand for new city cars and superminis more than any other type of car.

"Many of these cars are already in limited supply, and the expected additional demand will merely serve to extend delivery lead times.

"Customers not eligible for the scheme will also find themselves joining lengthening queues, and are therefore more likely to consider a late-used alternative."

Furthermore, Mr Rushmore indicated that some manufacturers may opt to increase the list prices for vehicles that have the highest demand from motorists benefiting from the scrappage scheme.

This could also mean that some may look for a viable used alternative, which offers significant financial savings.


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