Who Has Benefited From The Scrappage Scheme?

It has been well documented that the Government-funded Scrappage Scheme has done

wonders for the new car market, local car dealerships and the manufacturers. The low vehicle prices have enticed car buyers into purchasing a brand new car in return for their old banger.

The Government injected a substantial amount of money into the automotive industry on the premise that the manufacturers must match it. The scheme turned out to be a great move and got the once stagnant industry moving forward once again.

The manufacturers who benefited the most were Vauxhall and Ford. In particular the Corsa, Astra, Fiesta and Focus sold especially well as they were available with extremely enticing price tags. In fact, during the important 59' plate launch month all four of these vehicle occupied the top four places for having the most sales.

So, whilst the brand new Vauxhall Corsa has enjoyed great success since the birth of the Scrappage Scheme, the second-hand model hasn't done so well - which leads me on to the losers of the Scrappage Scheme.

In return for a brand new car the likes of the old Corsa, the Peugeot 106s' and the little Ka's have been scrapped and taken off the roads. This has had the biggest effect on new motorists looking for their first run-around. After celebrating passing their driving test they will eventually begin to look for their first car - and over the past year they would have found that the number of used cars on the market has been significantly reduced, and because of the high demand and limited availability, the prices have risen.

This will make their used car search much harder - so whilst the Scrappage Scheme has benefitted local car dealers and the large manufacturers, it has caused a bit of a stir in the used car market.

It has recently been announced that the Scrappage Scheme has been extended and the Government have pumped yet more money into the scheme. So, it looks like Vauxhall and Ford will continue to see great sales of their popular hatchbacks - as long as the Scrappage Scheme continues to entice motorists with attractive prices.

It will be interesting to see what happens to the used car market once the scheme ends - chances are it will eventually return to normal as used cars will be sold on rather than scrapped, then we will wait to see whether new car sales slow down once again, in what looks like the 'Scrappage Scheme See-Saw Effect'.

by: Lucy Penn

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