The UK Car Scrappage Scheme has been a total success, with almost 155,000 new cars being ordered as a result. The success of the scheme, in which owners of qualifying used cars will receive £2000 off the price of eco-friendly and efficient new cars, looked doubtful at first. After all, the owners of old bangers would hardly be able to afford to buy new, even with a £2000 discount.
Instead, the opposite happened. Car dealerships saw this as the shot in the arm they needed, and were happy to drop the prices of new cars for sale even further than the £2000 already discounted, if it guaranteed a sale. With loan companies offering preferential rates to customers with poor credit ratings, owners of used cars were queuing up to trade them in.
However, the scheme was a victim of its own success. The £300m allocated to the scheme was fast running out, causing panic among car dealers and owners alike. However, in the nick of time Lord Mandelson announced – at the Labour Party conference this year – that a further £100,000 had been allocated, allowing the used cars scrappage scheme to run until the end of February 2010.
This is great news for both the car dealer, and the owner looking longingly at the “cars for sale” sign in his window.
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