What a load of scrap

Wednesday 18 March 2009

I thought I’d seen most things during my time in the trade, but I must admit that I’ve never witnessed anything as daft as the Government’s half-baked plans to supposedly re-invigorate the British motor industry through ‘scrappage’ incentives – offering people a discount on a new car when they trade in an old one.

So here’s how – in the manner of a TV gameshow – it’s going to work. If you’ve got a car that’s over 10 years old, and it’s been registered to you for over a year, then congratulations! Because you qualify for a £2000 discount when you buy a new car, so long as you agree to let your old one be taken away to the crusher. Half of this two grand will be provided by Her Majesty’s Government, and half will be put up by the manufacturer of whatever it is you’re trading yourself into. So what’s the problem? Knowing where to start, to be honest – because this scheme has got more holes in it than the sills of the 15 year old Fiesta it’s meant to be taking off the road…

Question one: who owns the old bangers this scheme is targetting? Answer: poor people and tight people – neither of which is the most promising demographic when it comes to flogging shiny new motors. Low income buyers are likely to be more worried about their future job security than putting a new car on the driveway – which leaves the retail motor industry trying to persuade misers to part with their cash.

The next obvious point is that those that can be persuaded to buy a new car are most likely looking for a cheap, basic one – exactly the sort of cars that don’t get made in Britain. So the scheme is great news if you’re in the business of flogging Corsas or Aygos, but almost completely pointless if you work in one of the nation’s tumbleweed-infested Jaguar or Land Rover franchises. Then there’s the amount – a £2000 discount. With small, cheap cars that’s a decent saving, indeed it should be just about possible to get yourself into a new Suzuki Alto or similar in exchange for not much more than £4000 and granny’s beige Metro. But the further up the price lists you go, the more pointless it becomes – have punters really been waiting until now to spend £60 large on a Jaguar XK because they can save three percent by chopping in that Cavalier that’s been sitting behind the garage for three years? Next in the litany of sillyness is the blindingly obvious point that – for at least the last six months – it’s been possible to get a two grand discount on anything bigger than a motorised shopping trolley by simply entering a showroom, sneezing in a salesman’s face and then asking to wipe your nose on his tie.

I can guarantee with absolute certainty that the trade is going to see this Government-sponsored saving as being one that can be effectively subtracted from any other offers or inducements – I already know that some franchises are planning to argue that the £2000 discount means that no further haggling will be allowed, despite the fact that cars were previously going for more than two grand off list. And, of course, manufacturers have been pushing up their prices in recent months at least in part to ‘hedge’ themselves against this – two grand off a nine grand car sounds nice, until you realise that the same car listed for £7500 18 months ago…

Alistair Darling had barely returned to his seat after announcing all this before Citroen had confirmed it wasn’t even going to wait for the scheme to start before trimming two grand off everything in its line-up for anybody trading in pretty much anything – which tells you all you need to know about the trade’s inbuilt margins and dubious pricing practices. But the thing that really gets me choked is the fact the scheme is going to target completely the wrong sort of old cars – and send tens of thousands of perfectly decent motors to the crusher. People running real crudders aren’t going to be in a position to buy a new car – and because of the stipulation that anyone using the scheme has to have owned their banger for a year, they can’t flog their cars to anyone else looking for a discount.

Instead it’s the money-cautious middle class punters who are going to be trading in their cars, most of which are well maintained and – in many cases – have years of life left in them. The Government justifies all this with the completely spurious line that we’re doing the environment a favour by removing these dirty older cars. Really? So why will it be possible to ‘trade in’ a 45mpg Ford Ka against a 12mpg Range Rover?

What if you’ve got a nine-and-a-half year old car? Or you’ve been carefully saving your pennies to buy a new motor? Tough luck – and the job of explaining the needlessly complicated rules, and breaking the awkward news that the Government doesn’t think you’re worthy of a discount will go to the luckless sales exec in the dealership. So anyway, there’s a bloke who lives on a council estate near me with three old Ford Granadas parked on his front lawn and a nasty-looking Rottweiller keeping watch over them. Presumably he’s the ideal candidate for the new scheme – I just somehow doubt that we’re going to be seeing him in a showroom any time soon.