Car scrappage scheme launched
The car scrappage scheme, announced in Alistair Darling's Budget, is launched today.
The scheme sees motorists being given £2,000 towards a new car when they trade in their current vehicle, if it is over ten years old and they have owned it for 12 months or more.
Since Mr Darling made the announcement, scrappage has received a mixed reception, heralded by motor traders and approached cautiously by manufacturers, who have been worried it may drive manufacturing jobs away from the UK market place.
Environmentalists have also maintained their suspicions.
In an AA survey, respondents said the most important reason for buying a new car was to replace an old one, despite six months ago the reason given being to save money.
Mark Huggins, of AA personal loans, said: "Our research provides a valuable insight into the fluctuations of car buying behaviour. At a time when families are perhaps keeping cars longer, the new government scrappage scheme could be crucial to kick-start the industry and get people buying again.
"I believe that the scheme will halt the car sales decline but I would expect to see only a slow recovery over the coming year."
The Society of Motor Manufacturers and Traders (SMMT) have welcomed the scheme, and but claims we will have to wait until the June figures come out to see whether scrappage has been successful or not.
John Procter, spokesperson for the Society of Motor Manufacturers and Traders (SMMT) said: "As an organisation we were spear heading the call for a scrappage scheme; we listened to our members and submitted a very workable scheme to government.
"We were pleased that it was introduced. The intention was to give a boost to consumer confidence and it seems to have done that in respect to what it's trying to achieve. We will be keen to see how it works in practise, but we'll have to wait for the monthly figures in June to get a realistic sense of how well it works."
When asked about the criticism of the scheme that it will take manufacturing jobs away from workers in the UK, Mr Procter said: "We don't believe that to be the case. What people need to be aware of is that in the UK there are a lot of jobs in manufacturing (180,000) but there are 600,000 other jobs relying on manufacturing, by cars built at home or abroad."
Mr Procter also highlighted that many of the parts made in the UK go into cars which are brought in from abroad.
Sarah Garrod
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