UK Car Sales See First Rise Since April 2008
Earlier in May, a scheme was launched by the UK government that rewarded new car buyers when they scrapped an old car of theirs. Oddly enough it was called the ‘Car Scrappage Scheme’ and it gave car buyers 2000 towards a new car when they scrapped a car that’s more than 10 years old.
The cost of the scheme was 600 million. Half of the total pot was funded by the tax payers, as for the other half, it was funded by the car manufacturers. Even though this is alot of money, it seems to be paying off for the economy.
The total car sales for July 2009 have now been announced and they have found a 2.4% rise in sales compared to the same time last year. Overall, 157,149 new cars were registered in July, making a 2.4% on July 2008. Out of the total 157,149 cars registered in July, over 33,000 of them were registered using the scrappage scheme system. Although a 2.4% rise is not a huge number, it’s still good news because it’s the first rise in car sales since April 2008.
Due to the good result that’s occured from the scheme, many MPs are calling for Lord Mandelson to continue the scheme for 2010. The scheme is currently set to end by February 2010 or when the tax payers 300 million runs out. However, as it has proved so popular with over 144,000 cars registered with the scheme since it’s start back in May, I wouldn’t be shocked if it was continued.
If the scheme is continued, car manufacturers will be hoping that the rise in cars registered will continue as more people buy into the scheme.
Although this is good news for the new car industry, there are some downsides for other sectors. The first one affected is the second hand car market. Due to the large number of cars being scrapped, the amount of second hand cars on the market are being reduced. The second sector that’s affected is the cheap car leasing market.
Due to the high number of new cars being registered, the leasing sector is loosing out because people are opting for a new car rather than a Nissan lease when they can scrap their old car and save money on a new one. This problem has little effect on the van contract hire sector which doesn’t yet benefit from the scrappage scheme.
Citizens Automobile Finance
Tags: car leasing, cars, leasing, scrappage scheme, vans
