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Author Topic: Car scrappage scheme rip off  (Read 3404 times)

Bartapuss

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Car scrappage scheme rip off
« on: June 23, 2009, 11:15:00 pm »

If you thought the UK car scrappage scheme was meant to keep car industry afloat by plant workers in a job promote the use of greener more efficient vehicles and stimulate growth, think again.

The scrappage scheme is already being claimed a success with 35,000 people taking part but latest research from www.parkers.co.uk, a leading car-buying advice website, has discovered that buyers could end up paying more than the original on the road price by the time their finance agreement comes to an end.

Manufacturers that normally offer between 3.9% and 5.9% APR have pushed their finance rates up as high as 10.4% APR when used with the scrappage incentive.

One example was on a new Renault Grand Scenic Extreme:

The 1.6-litre VVT model would normally cost 14,995 at full price. With the scrappage discount and additional money off from the manufacturer this drops to 12,495.

However, if the car was purchased on finance - which would be the main option for many new car buyers - an agreement of 10.4% would have to be taken out, meaning the buyer would eventually pay 15,094 for the car, 99 over the original list price.

Parkers.co.uk also found similar examples at Toyota and Ford, and in some instances it even worked out cheaper to buy the car on finance without the 2,000 scrappage discount.

For a finance agreement at Toyota buyers can normally choose between 3.9% and 5.9% - depending on the length of the agreement and deposit - but to take it with the cash-for-scrap incentive the only option in the highest rate of 8.9% APR.

This means that a new 1.8-litre T2 Avensis with an on-the-road price of 16,565 should drop to 14,565 with the 2,000 cash-for-scrap offer, but eventually costs 17,264, 699 more than the list price.

When buying a Ford Kuga with finance Under the cash-for-scrap plan, buyers are forced to opt for 7.9%. Starting at 21,795, the 2.0-litre TDCi 2WD Titanium model falls to 19,795 with the 2,000 discount, but paying such a high interest means a final total of 22,903.

However, buying a Kuga under the normal finance agreement can be as low as 3.9% APR. Although a deposit needs to be paid on this agreement and it is over 25 months not 36 months, monthly payments are lower and the final amount paid by the customer is also lower at 22,792.

Poor savings

As well as eventually paying much more than the on-the-road price, there are also some offers which mean that buyers save very little - nowhere near the 2,000 discount promised with the cash-for-scrap scheme.

When taking out finance at Skoda the only rate available is 8.9% APR which means saving very little on cars like the new Superb. With an on-the-road price of 15,095, a 1.4-litre S model goes down to 13,805 with the scrappage discount. But under the finance agreement buyers will end up paying 15,762 an overall saving of just 143.

Buying a new SEAT under the scrappage scheme with finance also means a minimal saving. With offers of 0% APR on selected models outside of scrappage, this is raised to 8.5% APR with the scrappage discount.

A 1.2-litre Ibiza SC S with air-con is normally 9,505 on-the-road. This then drops to 7,505 with the 2,000 bonus but buyers end up paying 8,813 - a saving of just 182.

Also remember some of these new cars will be upto 2 years old aready as they've been sitting around in storage waiting for a buyer!!!
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malcolmfrary

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Re: Car scrappage scheme rip off
« Reply #1 on: June 24, 2009, 10:40:10 am »

Quite apart from any never-never schemes, if you pay cash, the instant depreciation will ensure that your scrappage bonus is totally eaten up within three months.
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Circlip

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Re: Car scrappage scheme rip off
« Reply #2 on: June 24, 2009, 11:30:03 am »

Nother little under the wire treat, Daughter was looking at the scheme to replace her car. I have a "Sorn" vehicle so suggested that she could use that as "The Scrapper"

 1. No, the vehicle has to have been owned by the purchaser for at least twelve months. (Cos some will go buy a scrapper and turn that in) not insurmountable BUT,

 2. In order to have your vehicle eligible to be SCRAPPED, it must have a current MOT CERT???????

   Regards  Ian.
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dreadnought72

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Re: Car scrappage scheme rip off
« Reply #3 on: June 24, 2009, 11:34:27 am »

I've never bought a new car. Why throw away thousands just by driving one out of the car dealers? It's a rip off. And I hate finance schemes. It's a way to lock you in, and often end up in negative car equity. Cash is best.

Instead I quite like the "hunt" behind finding the "next right car" ... and I'm currently two weeks into enjoying a four year old, 33000 miles Skoda Superb, 1.9TDi, FSH, top spec, which cost less than half the price quoted above by Bartapuss for a low-range new 'un.  :-))

Andy
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sheerline

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Re: Car scrappage scheme rip off
« Reply #4 on: June 24, 2009, 02:24:43 pm »

So, what were'e talking about here is throwing away a perfectly usable MOT'd car to enjoy the dubious merits of buying a new one. The scheme is yet another ill thought out load of garbage to come from the morons in Westminster.
This governments God has been green issues when it comes to cars and they have done their level best to make us all feel guilty everytime we put the key in the car door. They even used the green issue as an excuse to stick the price of fuel through the roof and play around with the road tax levy to supposedly 'discourage' us from using the vehicle at all.
If you took an old car, lets say 6 years old ,90,000 on the clock , MOT'd and still running fine, by my estimation and with the current construction of modern vehicles, that car should give at least another five years reasonable service providing it wasn't a shed on wheels. The government would have you believe you are doing the planet a favour by getting rid of it as the newer vehicles are much greener.
To replace your ageing 'polluting' vehicle would result in the construction of a new one. The amount of energy and pollution used in the construction of the new car far outways the amount of pollution created by your old one in the last five years of it's expected life. Firstly, there is nothing green about buying a new one, secondly, it would appear the green issue just took a nose dive in favour of the economy and jobs.
When the chips are down, the governments green rule book flies out of the window.....unless we're paying more of course.
Never seen it piled higher or smelling as bad as it has done since this lot took control!!
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dreadnought72

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Re: Car scrappage scheme rip off
« Reply #5 on: June 24, 2009, 02:47:58 pm »

there is nothing green about buying a new one

Unless it's a green coloured one, of course!

But what you say is true. The message is wrong. IF car makers and sellers need support (and I thought we followed the laws of free markets?) THEN it would have been wiser and probably more honest to give 'em a bung.

Andy
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Colin Bishop

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Re: Car scrappage scheme rip off
« Reply #6 on: June 24, 2009, 05:50:55 pm »

Report today on the BBC that Ford are putting their prices up by 4%.... %)
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funtimefrankie

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Re: Car scrappage scheme rip off
« Reply #7 on: June 24, 2009, 08:20:45 pm »

Well I've taken advantage of the scheme and don't feel ripped off one little bit.

I got an 8K car for 6K

The tales above are just red herrings, So my new car will depreciate in a period of time, so it would have if I had paid the 8K I was going to pay before the scheme came in.

I traded in a car that was worth in trade-in about 500,
It needed
an MOT within days...50 without any jobs,
a set of tyres soon...300,
a cambelt 200,
it did 25 mpg,
and tax was 190.

The new one does 50 mpg and tax is 35.. and the car is guaranteed for five years.

Bring it on... or as they say no brainer

You have to remember.... that the scheme is not compulsory, you don't have to buy a new car if you don't want to, if you do you don't have to take out the dealers finance offer, better deals are available...so use one of them...all new cars depreciate whether you buy on scappage scheme or  the massive discounts that Parkers say you can get or at the full price.
But if you do want a new car, it's a free country...and the scrappage ticks your boxes, as they say then that 2k plus saved...thank you.

The only rip off was Bennett's  motorcycle insurance, charging 25 to issue a new certificate when I swopped to old car's number on to the bike. The bike policy cost 87...not much short of a third of the premium  for a new certificate...

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funtimefrankie

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Re: Car scrappage scheme rip off
« Reply #8 on: June 24, 2009, 08:28:47 pm »

Quite apart from any never-never schemes, if you pay cash, the instant depreciation will ensure that your scrappage bonus is totally eaten up within three months.
Thanks very much, so my depreciation is paid for by the govn. and the car firm.....ta !!! :-))
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red181

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Re: Car scrappage scheme rip off
« Reply #9 on: June 25, 2009, 12:02:48 am »

just to add my little bit, as I am in  a new car dealer, Mr Parker has never bought a car in his life, if you are not happy with the dealer trade in allowance, ring Mr Parker, ask him to honour the "GUIDE" price, and thats what it is , a  guide, if he writes you a cheque for the over inflated price he states, I will bow down in forgiveness :}

If you dont like paying the interest on a dealer finance loan, dont take it, just go to your bank, but remember this...... Most dealer plans are motor loans secured on the car, not like a personal loan, secured against you, and therefore may need additional security. Motor loans can offer a guaranteed minimum future value, ask you bank for that!, if you settle a motor loan early, providing its a fixed rate, regualted by the consumer credit act, you receive a rebate of interest, not with a personal loan. You also, under the consumer credit act, have voluntary termination rites, not on  a personal loan. When half the total amount payable is cleared, if you are in negaitve equity, you can just give the car back, nothing to pay :-)) (subject to vehicle condition). A personal loan ties up part of your credit line with the bank. Our good ols banks are skint, and just like motor loan providers, are lookng to recover from the last few months of poor trading, dont be niave enough to beleive that the low rates advertised are actually available to everyone!
Dealer who offer the very low rates, such as zero percent, 4 percent apr, etc, are subsidising those rates in nthe metal, so are actually paying the loan providers for the low rates. The money comes out of the chassis, so if you dont want the finance, challenge if there is a better deal on the car, sometimes there is, but if you are driving the poor salesman down, have your credit card ready to give a deposit, nobody likes a timewaster!!!! :embarrassed:

With regard to the gov scheme, its a nightmare to administer, as the gov proportion takes months to come through, so the dealer is out of pocket. And if having an mot on that old junker is a problem, then hard luck, it has to be roadworthy to arrive at the dealer, however there is a period of grace between order and delivery, so you dont have to re mot or tax. Some of the cars we have had for scrap are nice old cars, eg, 2 owner FSH 1990 318 BMW, 80k, trade value 500, gov allowance 2k, so customer was pleased!, now we have to wait for the car to be collected, and are 2k out of pocket for the foreseable future >:-o

As regards paying over the odds on new versus pre owned, like an ex demo, we recently had brand new BMW 116 sport's, 2k scrap allowance, 1k finance deposit allowance, nil from customer, 250 per month, 42 months 7.8apr  pcp, guaranteed future value so you can give it back at the end, its just cost you monthly payments 250x 41equals 10250 for a 19k car. I know 250 is a lot of money, but put it in context, you have paid 1/2 of the car, try calling Enterprise car rental for a price per month on a ford KA, then you see value! :-))
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Circlip

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Re: Car scrappage scheme rip off
« Reply #10 on: June 25, 2009, 03:07:42 pm »

Errr, It don't  need to be roadworthy to be delivered on the back of a low loader to the dealer.  8)  and we're trying to Help the poor destitute manufacturers and dealers earn a meagre living.  O0

  Hmmm, just had another thought, IF I were an MP, would I be able to claim the 2K back And get tax relief from the Fees office??

  Regards  Ian
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regiment

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Re: Car scrappage scheme rip off
« Reply #11 on: June 25, 2009, 04:54:02 pm »

by buying a vw made in germany ?? how is that helping  GB get out of the mire
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malcolmfrary

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Re: Car scrappage scheme rip off
« Reply #12 on: June 25, 2009, 05:25:03 pm »

by buying a vw made in germany ?? how is that helping  GB get out of the mire
Probably a lot less about getting manufacturers out of the mire than getting the banks out of the mire that they got us into in the first place.  Any side benefits will be purely co-incidental and regarded as a mistake to be avoided in future.
Which GB did you mean?  The UK or the one with the glass eye?
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regiment

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Re: Car scrappage scheme rip off
« Reply #13 on: June 25, 2009, 06:38:55 pm »

the one who can only see one side of the mess we are in
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djrobbo

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Re: Car scrappage scheme rip off
« Reply #14 on: June 25, 2009, 07:26:23 pm »

I love it .....i love it :-))   Took wifes old feista auto worth all of 200 squids , went to suzuki and bought her a brand new alto sz4 with all the goodies..
   total price paid was 6380......after nice man gave me 2000 for said fester
  Car does 70 to the gallon.........road tax is 35 instead of 120 . and for 299 squids i took out gap insurance which gives me back new for old , should the car get written off for any reason within the first three years , so no depreciation.........and no interest cash sale...

           Conclusion ........dont use finance and trade an old clunker in.

           as they say " it works for me "

                 regards    bob.
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knoby

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Re: Car scrappage scheme rip off
« Reply #15 on: June 25, 2009, 08:09:22 pm »

I like the scrapage system too, its not great but its a start. I'm looking to buy a new car, spent only 4 hours shopping around on the web & the phone Saturday. there are some great deals available out there if you bother to look. A ford mondeo estate 22850 with the scrapage payment & some good negotiating i got 6750 off & 3.9% finance deal offered, & that was just over the phone!!!
Id like to buy a car manufactured in the UK, to do my bit for the economy, & as soon as i find a half decent car that is actually produced in the UK i will happily buy it. Until then the mondeo looks like the best deal, & at least some UK companies will earn something from it in the way of servicing, parts & labour. By the way vw employ over 20000 people in the UK, so buying a vw does help a little.
Its so easy for us to sit on our rear ends & write endless complaints about everything, much harder to get off our rear ends & do something about it!!!
if people are prepared to borrow more money than they can afford to pay back , what do we expect to happen to the economy??

Just my thoughts on the subject   glenn
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Anchorboy46

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Over here in the USA
« Reply #16 on: June 29, 2009, 06:08:48 am »

We are real tired of all the forking rip-offs our government and others have tried on us. We laugh at thier stupid schemes. We have a "scrap" program as well.
 Most all the family folk all know it's a sham and steer clear from it.
  You can look at our ports in the West Coast (Los Angeles) and East Coast (New York) and see all the foriegn cars piling up at the docks.
 We're not buying. W'ere not leasing. W'ere not borrowing. We are holding on to our old cars. Most Americans are doing something they haven't done in years. We are SAVING.
 We are using our old furniture. Our old cars. Our old tools. We go to garage sales. Swap meets. Flea Markets. We buy from our FRIENDS.
 Malls are closing down. Over priced shopping centers. Chinese goods. We are CLEARLY SENDING a message to the world.
 We are putting on the brakes. The kids have started up this new movement called the "minimalist movement". It's where they only need the minimal amount to live.
 In America, everywhere you look, there is a glutten of manufactured goods everywhere.
 Even our poor have two cars,an apartment,a cell phone, T.V.'s in each bedroom,a computer,an I-pod, and "BLing" areound thier necks. It's disgusting. There's just way too much junk in the world, and way too many cars. It's gonna hurt at first, but we are going to slow down. Way down. We alreday have buildings all over the country boarded up. We are concentrating on agriculture and energy right now. Mostly wind/solar but I'd like to see America go nuke. That would really give a lot of jobs. W'ere at 9.4 per cent unemplyment and I here Scotland is at 20 percent. Heavan help us all...
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Seaspray

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Re: Car scrappage scheme rip off
« Reply #17 on: June 29, 2009, 01:28:20 pm »

Aye unemployment in Scotland was unemployed in Scotland for a lot of the time I lived there (26 years). Last bout of umemployment was 6 years there having to give up driving buses because of a painful accident to my hand at work a couple of years before. Came to Kent and was amazed at 2 cars / caravans / boats / in the driveways / jobs with pensions / and holidays, these people had going for them and it was only 350 miles south of where I stayed. Aye and its changed down here now and the best o luck to them they'll need it.

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sweeper

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Re: Car scrappage scheme rip off
« Reply #18 on: June 29, 2009, 04:30:34 pm »

A report in the papers the other day.
Hyundi has just brought a new plant in eastern Europe on stream. They are contracted by the local government to build a certain number of cars per year.
So there is a downturn in the UK market... Ain't life tough?
They still have to turn out the cars and are (as the story quoted) in the position of having to dispose of them at whatever price they can get.
At least it's good to know that one government (sadly not ours) has got the bottle to make manufacturers stick to their contracts.
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