60,000 take up car scrappage scheme
Over 60,000 motorists have taken up the government's car scrappage scheme since its launch.
The scheme went live on May 18th offering drivers a £2,000 discount on a new car if they scrapped a vehicle over ten years old.
The 60,000 vehicles scrapped up to June 7th represent a fifth of the total £300 million funding to cover 300,000 vehicles.
"Consumers know a good deal when they see one. These figures speak for themselves," said Lord Mandelson, head on the new department for Business Innovation and Skills (BIS).
"Car manufacturers continue to report on the success of the scheme with rising sales. It is the boost that the industry needs."
While initial sales have been positive, it is uncertain how much of the demand has been caused by those holding off buying before the scheme was up and running.
As this pent up demand is released, the full success of the scheme may take months to be fully determined.
A spokesperson for the Retail Motor Industry Federation (RMIF) reported the body's members are seeing a great increase in demand.
"The scheme has been a success so far," he said.
He explained the initial burst of interest has been in part due to people holding off from making a purchase and because of the actual discount the scrappage scheme offer.
"Our members report in the lead up to the scheme, general interest in buying cars, even if they are not taking part, has increased.
"There has been a halo effect for car buying," he added.
Interest has been particularly high in smaller cars, where the £2,000 discount makes a substantial difference.
Ian Crowder, at AA personal loans, explained there had been a small increase in the number of people taking out car loans.
"There is a lot of anecdotal evidence that people are using savings rather than taking out a loan to buy a new car," he said.
However, he warns buyers not to immediately accept car dealer finance when buying a car.
"There are lots of deals out there," he said. "But if the APR is more than eight per cent, then you could be better."
He added drivers should shop around for the best deal on the cars, scrappage and loans and they should not be led into thinking a new motor is dependent on signing up to a dealer's finance package.
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