The Government’s £300m car scrappage scheme launched last month and has proven to have no real effect after sales figures were released that showed a 24% drop in new car sales.
The Government’s car scrappage scheme provides the consumer with £2000 towards a new car if they scrap a car that’s older than 10 years old. The scheme launched in May, however, there were arguements from day one regarding costs, this lead to a number of manufacturers, one being Ford, holding off on their involvement in the initial stages.
Yet another month of low car sales means that the UK has now seen a steady decrease in car sales over the last 12 months. This simply weakens the reports that consumer confidence is improving.
The Society of Motor Manufacturers and Traders announced that a total of 35,000 new cars had been ordered through the new scheme, however it will take some time to transfer these sales into new registrations. They also used the excuse, to give the scheme some extra time to prove itself, that a number of customers are weighing up offers to try and get the best deal before buying a new car. The Ford Fiesta came out the most popular car last month out of a total 134,858 sales.
Only 15,386 of the overall sales were from Vauxhall after they suffered a 40% drop in sales.
The overall number of corporate sales during May has had a huge effect on the overall number of new sales for 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 introduction of the car scrappage scheme, consumers are encouraged to buy a new car rather than consider other options.
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