Scrappage: the view from the frontline

Wednesday 04 March 2009

Less than 24 hours after the Government’s Scrappage scheme started, I got a phone call from a mate who manages a big Toyota franchise. Knowing my love of high-quality bangers, he could barely contain his excitement as he told me I wasn’t going to believe what he’d just signed up as a to-be-crushed part-ex on a new Auris: a 42,000 mile, one-owner 1999 Skoda Octavia.

I wasn’t able to look at it myself, because the punter won’t actually drop off the Octavia until his new car is ready in a couple of weeks. But my friend assured me that it was in near immaculate condition, complete with the reasonably keen 1.8 litre petrol engine, a fully-stamped service history and most of a year’s MOT. Apparently its elderly owner reckoned that the £2000 incentive was too good for him to miss, and so opted to chop in his cherished Skoda to take advantage.

The irony, as my mate picked up (but didn’t pass on), being that the Skoda’s tidy condition and one-owner lineage would make it relatively simple for the old guy to sell it for more than £1000 – while even a stuffed toy would have no difficulty in negotiating a £1000-plus discount on a mid-spec Auris being bought for cash. I can’t blame the bloke for wanting a new car and reckoning he’d let the Government help him to pay for it – but I do wonder about the sense of a system that requires a modern car capable of 35mpg and with years of life left in it to be destroyed.

Because that’s probably the single most objectionable thing about this Scrappage nonsense – the fact that the car that gets taken as part-ex has to go straight into the crusher, whatever its actual value or condition happens to be. Or how about a story from the other end of the scale. When Scrappage is announced last month a bloke goes into a Nissan dealership and opens negotiations on a new Micra, with the plan being for him to part-ex his very ratty-looking 1995 Fiesta to bag the two grand. The Ford’s a total heap and would have doubtless been heading for the great crusher in the sky very soon anyway – indeed, the owner admits that it’s due an MOT and he doesn’t think it will pass – so the system is doing everyone a favour. Except, it’s not – because by the time Scrappage is actually up and running and the guy heads back to the dealership to sign the paperwork, his Ford has been out of MOT for nearly a month. And, if you’ve got the two hours necessary to read through the small print, scrappage payments will only be made on cars that “have a valid MOT or one that expired no more than 14 days before.”

Obviously, the punter is a bit reluctant to spend several hundred quid getting a fresh MOT for a car that’s about to be turned into a small cube – leaving the dealership to solve the problem through some old-fashioned sleight of hand. Isn’t it amazing how easily a ‘5’ can be turned into an ‘8’?

Of course, the paranoid bureaucracy behind scrappage is also encouraging punters to try and find loopholes wherever they can. I’m reliably informed that a well-known online auction website is suddenly full of listings for the more valuable parts of some of the cars that are going to be traded in. Because, as long as the car has a valid MOT and is registered to the same keeper as the new car, it doesn’t even need to be a runner. I reckon it won’t be long before somebody tries to trade in a car without an engine or gearbox.

And in the meantime, where’s all the incentive money going? Unsurprisingly, it’s being spent on exactly the sort of small, cheap cars that make dealers and distributors precious little margin, and which don’t actually get produced in Britain in the first place. If you’re running a Hyundai or Kia franchise at the moment you’ll be wearing a grin broader than a cattle grid as people form queues to buy Picantos and i10s – but at the other end of the scale, scrappage is going to do almost exactly nothing for the prospects of companies like Jaguar.

And the scheme has another unforeseen consequence – keeping other old cars on the road. I’ve heard of two punters who were planning to change their cars but then decided not to when they learned that their current motors weren’t quite old enough to get the incentive. One had a Renault Megane registered just over a month too late to get the £2000 and has taken the reasonable enough view that, as the thing still runs, he might as well wait a few months to see if the Government extends the scheme for slightly newer cars.

Which, if the motor trade gets addicted to these artificial payments, might well end up being the case.