Inspiring Talent For A Better World

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Used and New Car Shortages

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The Government's scrappage scheme has proved hugely popular and has created some interesting market effects. The scheme is designed to help more people replace older, less environmentally friendly cars with more economical and greener models. It is available for those whose exchange vehicle is a passenger car or small van, was registered before 29th February 2000, has a current MOT Certificate, and is DVLA registered in your name with a UK registered address.

On 28 September 2009, the government announced plans for a further £100 million funding for the scrappage scheme. This meant that the scheme will now cover up to 400,000 vehicles. There have been fears that this will cause a price rise in used vehicles but that has not proved to be the case. However, by removing such a large number of vehicles from the market it has caused a shortage of vehicles which, in some sectors, has caused a few problems for those seeking to change their vehicles.

Also, most drivers who offer their used cars to the market which are more than 10 yrs old, are not new car buying customers. This, of course, is a general assumption but seems to be borne out by the fact that those buyers keen to take part are opting for smaller, economical models of which there is a shortage.

However, if a dealer cannot satisfy an order because of a stock shortage they are still grateful to have an enquiry from a potential customer who is keen to change their car. Some are combating this little conundrum by attempting to convert customers into used cars by offering a deal nearly as good as the scheme. They also rely on the fact that many drivers of older cars have not had recent buying experience and will be dazzled enough by the sparkling up to date models to be quite easy to sell to.

Nevertheless, the old maxim still stands - when is a deal a good deal? When the person on the receiving end believes it!