Are scrappage schemes worth it?

Are scrappage schemes worth it?
Are scrappage schemes worth it?

We’ve been here before with scrappage schemes – is it different this time?

Perhaps the first point to remember when looking at the current scrappage schemes is that they are not backed by the government. That means that the 23 car companies that are running schemes are running their own, on their own terms. Some, such as the schemes by BMW, Hyundai, Mercedes, Mini and Nissan, are simply part-exchange schemes, since they don’t scrap the cars. So how do you find the best route through this scrap yard?

It’s hard to make generalisations, since each scheme is different, but generally they want the car you want to trade in/scrap to be Euro 1-4 compliant, and registered before 31 December 2009.

Most want that car to be a diesel, but not all. Most want you to have owned the car for at least 90 days, although for some like Mercedes and Seat it has to be six months’ ownership.

There’s a sliding scale of allowance for most, as opposed to the £2000 that Vauxhall offers. Not all new models are eligible, nor all trims, which tells you the manufacturers are less worried about saving the planet and more worried about shifting sticky stock.

Various manufacturers do present this in a better light, such as BMW and Mini not allowing new models with over 130g/km of CO2 to be in the scheme – with 80 per cent of BMWs emitting less than that it means most vehicles are eligible.

It’s also worth bearing in mind that this is an offer that usually replaces other offers, rather than being an additional offer. So if there was a great PCP deposit contribution then you can’t have that and the scrappage allowance. Which means going for the scrappage scheme may not be the best offer on the table. So we tried it for real.

We had a 1.6 SXi Vauxhall Astra, a 2006 model with 95,000 miles on the clock. It’s Euro 4 compliant and so bang on the money for this scheme. It was worth maybe £500 as a trade-in. At a Vauxhall garage we took an interest in an Astra Sri 1.0i Turbo, unregistered on the forecourt. With a full price of £20,100, the scrappage allowance plus a finance deposit allowance (FDA) knocked it down to £15,192. The FDA was available if we bought on a PCP finance deal. The salesman suggested we take that deal then pay off the PCP deal at once in full. ‘People do it all the time.’

A Ford garage tried to tell us their scheme was backed by the government, which it isn’t, but we looked at a Ford Focus 1.0 125PS ST-line with quite a few extras, which would mean £20,280 after the £4450 scrappage amount. Normally maximum discount is £2500, plus this deal threw in 0 per cent finance, so it looked attractive.

Hyundai offered an i30 1.0 T-GDi SE Nav for £16,006 which included a £4000 scrappage figure. The salesman seemed on our side: “You’re better off doing it this 
way by £1000,” said the salesman. “Without scrappage, your Astra is worth £500. My maximum discount is £2500, which makes £3000 off the price. This way, you get £4000 off.”

These are the sort of calculations you need to make before deciding if the latest scrappage scheme is right for you, the car you’re selling and the car you’re buying. Just be clear what is on offer and whether this scheme is instead of or as well as other incentives, because that isn’t always the case either way.

 

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