Vince's Verdict ... Are Scrappage Schemes A Clean Air Savoir or a Marketing Ploy?
The news surrounding diesel cars idles on. Older diesel vehicles on our roads that do not conform to Euro 6 emissions standards have come to represent the main villain in our war against air pollution. Now manufacturers are offering drivers the chance to trade in their older vehicle for a newer cleaner model – surely, they only have a cleaner planet on their minds … don’t they?
This month our Chief Operating Officer Vince, has been reading an article by Tom Rawstorne for the Daily Mail in which he exposes that the new scrappage schemes may not always offer the best deal if you are looking to buy a new car…
“The issues surrounding diesel cars are not going to go away. Despite the Government’s insistence years ago that diesel engines were better for the environment, we now have scientific evidence in abundance that tells us; fumes from older diesel engines contribute to the premature deaths of up to 40,000 people every year and are more polluting than petrol engine fumes.
Yes, we should feel angry the Government led us down the wrong road by encouraging drivers to purchase diesel cars. Yes, we should feel angry that those same diesel cars are now facing extra charges, such as the London T Charge. But being angry doesn’t fix anything, we still have the same polluting cars, releasing the same amount of harmful emissions, we are just in a worse mood about it all – because no one likes to feel they have been duped.
When the Government revealed their Air Quality Strategy earlier this year, it was expected details of a scrappage scheme would be announced to help those in the most polluting cars upgrade to a more environmentally friendly model. The new Euro 6 emissions standards make diesel vehicles as clean as petrol vehicles, if all cars on the road were of Euro 6 standard air pollution could be substantially reduced. However, no such Government scheme materialised. But, never fear, car manufacturers themselves stepped up and one after the other began to announce their own scrappage schemes which did not rely on any Government funding.
My concern is this – are the 13 manufacturers involved in new scrappage schemes motivated by emissions figures or sales figures?
I don’t want to demonise manufacturers, but my sceptical mind finds it a little convenient that announcements of scrappage schemes came as the car market entered its 6th consecutive month in decline. According to the Society of Motor Manufacturers and Traders there were 9.3% less new registrations this September when compared to September 2016. In my opinion, even this statistic hides the true scale of the decline, as it doesn’t reveal how many of these ‘registered’ vehicles were ‘pre-registered’. Cars can be registered when they don’t yet have an owner, so although they will appear to be a new registration, there is no one driving it, it’s sat waiting to be sold.
My worry is that some manufacturers may be using the media hype to their advantage and luring customers in, when a scrappage deal may not even be the right thing for them. Going back to Tom Rawstorne’s article of the 7 scrappage deals he looked at only 3 would offer the best deal for him. There is no way to categorically say whether a scrappage deal is good or bad, as the value of the car to trade in makes an unknown variable in the equation, and each deal has its own set of restrictions. Each case must be looked at individually, However, there is some advice everyone could follow ...
Before you take a scrappage scheme deal
- Find out the value of your car yourself – do not walk into a car dealership and allow them to tell you the value of your car, which you then just accept. There are so many tools out there that will give you a valuation of your vehicle. We have one on our website, which provides a valuation by Auto Trader. An Auto Trader valuation will reflect the current market conditions when valuing your vehicle and is a neutral body – they have no vested interest in the value of your car, as some car dealerships might.
- Make sure you ask the salesperson to confirm ALL marketing programmes available. Just because scrappage schemes are being offered, doesn’t mean there are no other deals to be found, there may be other promotions running alongside the scrappage scheme. Make sure you know about them all before you decide that scrappage is right for you.
- Consider car finance carefully. When Tom Rawstorne explored his scrappage options, he found some dealerships were championing the benefits of Personal Contract Purchase (PCP) … PCP is great if it is the right product for you. Again, I don’t want to demonise manufacturers but there may be an ulterior motive for them to get customers signing a PCP contract. I discussed these in an earlier Vince’s Verdict … response to ‘Secrets of You New Car’. I would urge everyone to read our car finance checklist in this article before they enter into any contract.
Another reason I have my doubts over the current scrappage schemes is because I am comparing them to the scrappage schemes of 2009. This scheme had the support of £300 million from the Government which added credibility to the scheme these current ones do not have. There were also less restrictions on the cars available to upgrade to. In these current schemes manufacturers are naming models you can use the scrappage scheme to buy, could this just be a clever way of clearing out old stock before a new model masquerading as an altruistic action to save the environment?
As Rivervale’s primary business is car leasing I was concerned about how these schemes would affect our business. We can offer no such deals. So far, we have not seen any affect at all, we trade in vehicles at a price which reflects the current market and apply any discounts we receive to prices immediately – this kind of transparent and fair way to do business seems to continue to benefit us.
Without a doubt for some people taking advantage of one of the many scrappage schemes on offer may prove beneficial. I would just say, make sure you do your research before making a decision. Our Account Managers at Rivervale are always on hand to give neutral advice for your situation, so never hesitate to give us a call.
In a final thought – what do we do about those driving an older vehicle, who may still not be able to afford to upgrade to a newer model even with a scrappage scheme deal?
What do you think of the current scrappage schemes?
The comments above do not necessarily reflect Rivervale's views unless clearly stated.
11 October 2017
Written by Natalie Faughy