Scrappage leads to big sales

May 29 2009 by Kelley Price, Evening Gazette

MORE than 35,000 new cars have been ordered through the UK’s scrappage scheme since it started a month ago, it was announced today.

Teesside’s motor dealers are reporting massive sales increases, as customers take advantage of the scheme.

Around £2,000 is on offer for the scrappage of cars that are 10 years or older, against the purchase of new models. The incentive includes £1,000 from the Government, with dealers and manufacturers making up the rest.

Simon Bailes Peugeot has claimed 25% of its sales are down to the scrappage scheme since its launch on April 22. Sales of small, eco-friendly, fuel efficient cars are most popular.

MD Simon Bailes said: “Offering customers incentives to buy cars with lower emissions is the simplest and most effective way to encourage sales in the sector.

“We’re already seeing a number of new customers scrapping their old cars in favour of our small, environmentally-friendly cars which will save them money in the long-run.

“The introduction of the scrappage scheme is something that the industry has needed for some time and will benefit from greatly over the coming months.”

Ministers are pleased with the take-up so far, which represents more than a tenth of the total subsidy available. Government has set aside £300 million and the scheme operates on a first come, first served basis until the end of March.

A spokesman for the Department for Business, Enterprise and Regulatory Reform said: “We are really pleased that the scheme seems to be delivering a boost so early on.”

So far all makes of cars have been ordered.

The formal roll-out got off to a chaotic start when top-selling companies Ford and Honda delayed taking part due to discrepancies over how much they would be required to contribute.

Last week Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, said the scrappage scheme was “enticing car buyers back into the showrooms.”