Car Scrappage Scheme has no effect on UK car sales
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The Government’s new £300m car scrappage scheme is yet to have any affect on the market after new car sales figures have been released that showed a 24% drop in new car sales.
The Government’s car scrappage scheme provides the consumer with £2000 when they scrap their old car for a new model car. These scheme launched in May and strated hitting road bumps from stage one. There were arguements over costs which lead to Ford holding off on their involvement.
The UK car market has now suffered 12 months of sale losses, even with the new car scrappage scheme being introduced. This doesn’t reflect the news that consumer confidence was recovering slightly.
A total of 35,000 new cars have been ordered through the scrappage scheme, according to The Society of Motor Manufacturers and Traders, however, they say that it would take some time for this number to affect the sales figures. They also said that they believe a large number of consumers are considering their options before buying, this could just be an excuse to give them some extra time to prove the car scrappage scheme isn’t a waste of money.
A total of 134,858 new cars were sold last month, with the Ford Fiesta coming out on top. Vauxhall have suffered this May after they were hit by a 40% drop in sales, they only contributed 15,386 to the overall sales.
The amount of corporate sales has had a major affect on the number of new car sales in May. Car leasing companies that offer a range of makes, such as Vauxhall leasing and BMW leasing, are reducing the amount of cars they are buying because they are also suffering from the economic crash.
Many leasing companies are cutting jobs because when many people consider getting a new car, they forget about the leasing options that are open to them. Plus, with the new car scrappage scheme trying to get people to buy a car, consumer are encouraged to buy rather than consider other options such as leasing.
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