F&I Management & Training

The Government should kick-start car sales by launching financial incentives to encourage owners to voluntarily scrap older cars and replace them with new models. The call came from the AA on the eve of a motor industry summit today (Wednesday, January 28) where Business Secretary Lord Mandelson will meet car industry representatives to discuss help for the industry. The AA has written to the Treasury saying the scheme would help reduce vehicle emissions and add a needed boost to new car sales. Simultaneously, it has been revealed that a scrappage scheme in Germany has sparked a rush on car dealers prompting speculation that 2009 new car sales could be higher than expected. Since January 14, car owners have been able to obtain Government certificates entitling them to ?2,500 if they scrap a car that is at least nine years old and buy a new or nearly-new model. The German car dealers' organisation, ZdK, says it expects 200,000 more cars to be sold as a result of the scheme. France has also seen an upturn in sales after the Government introduced a bonus of ?1,000 at the beginning of December for people scrapping a car at least 10 years old and replacing it with a new model with carbon dioxide emissions of less than 160 g/km. The French Government claims the scheme will lift sales by 100,000 units this year. In the UK, the AA says that the current Vehicle Excise Duty (VED) system gives an incentive for some motorists to hold on to pre-2001 cars particularly if they want a more powerful and bigger car. There are two flat rates of VED for pre-2001cars, one below 1,549cc and the other above. These vehicles tend to be the gross polluters and tend to be less roadworthy and less safe. In the proposed AA scheme a voucher against the purchase of a new car would be awarded. The motorist would take the old vehicle to the dealer and the dealer would offer the £500 discount plus any additional discount which would be increased to cover the scrap value. The AA estimates that there are approximately 4.26 million pre 1996 cars or 14% of the car parc. AA president Edmund King said: "A cash incentive to get the older gross polluter cars off the road to be replaced by cleaner, greener, safer models would be a boost to sales, the environment and road safety."

DATED: 29.01.09

FEED: AW