Car Scrappage Scheme Risks and Pitfalls for Motorists
Motorists looking to trade in their old cars under the Car Scrappage Scheme launched today (18th May) risk being turned down because small print within the scheme requires the new car to be registered at the same address as the old vehicle.
Any motorist failing to do so will need to provide evidence that they lived in both addresses, or else run the risk of being denied the total £2,000 subsidy. Last year a police study found that around three percent of cars on the road were registered to the wrong address.
And now uSwitch, a price comparison website, has found that those people who do participate in the scheme will find the benefit of the subsidy wiped out within 88 days due to the rapid rate of depreciation on new vehicles. New cars will on average drop in value by some 49 percent in their first year.
Furthermore, motorists should brace themselves for a hike in the cost of their insurance policy due to the increased value of their new car versus their old vehicle.
The industry however still had high hopes that the Car Scrappage Scheme will kick start demand for cars in Britain, much as it has done in Germany following the introduction of a similar scheme earlier this year.
The Society of Motor Manufacturers and Traders have reported a sharp rise in potential buyers, whilst Sue Robinson, Director of the Retail Motor Industry Federation said that dealers had reported a “marked increase in enquiries since the scheme was announced in the Budget in April.”