in here!
http://business.timesonline.co.uk/tol/b ... 481949.ece
Car manufacturers are charging higher rates on finance deals for customers
using the scrappage scheme, according to research carried out for The Sunday
Times by Parker’s car buying guide.
Under the cash for scrap plan, announced in the April budget, owners of cars
more than 10 years old receive £2,000 to put towards a new vehicle.
Manufacturers have to find half, encouraging them to offset the cost in other
ways.
We highlight some of the ways they are clawing back revenue.
Higher finance rates
Manufacturers such as Ford, Toyota, Skoda and Seat are among those charging
higher rates on finance deals.
A Skoda Octavia S, for example, costs £11,540 new. Under the scheme, buyers
would be given a reduction of £2,545 because Skoda offers a £1,545 discount
(more than required) alongside the government’s £1,000 contribution. The
remaining £8,995 can be borrowed over 35 months at a rate of 9.1%. A deposit
is not necessary as the scrappage counts towards this. The total repayment over
the term would be £10,604, according to Skoda.
Outside the scheme, buyers would have to pay a 30% deposit (£3,462) but the
remaining £8,078 could be borrowed at 0% interest over 35 months, giving a total
repayment of £11,540. Although you are £936 better off under the scrappage
scheme, the example highlights how the original £2,545 discount has been partly
offset by a higher finance rate.
In some cases, you could be better off not using the scheme. Finance on a 2.0-litre
Ford Kuga with a list price of £21,795 is available at a rate of 7.9% over 37 months
under the scheme. No deposit is needed and the total amount payable is £22,903.
Outside the scheme, you would have to pay a deposit of £5,165 followed by a shorter
credit period of 25 months but at a rate of only 3.9%. The total payment would be
£22,793 — £110 less, according to Parker’s.
Seat offers 0% finance outside the scrappage scheme, but 8.9% with it. Toyota is
offering 3.9% without scrappage and 8.9% with.
Some manufacturers do offer good finance deals alongside scrappage, however.
Honda provides 0% under scrappage on new Civic, Civic Type-R and CR-V models.
Suzuki offers 0% finance on most models.
Be wary of alternative scrappage schemes
Unlike the government scheme, where only cars over 10 years old qualify, some
manufacturers such as Mitsubishi have introduced their own versions offering
£2,000 for five- to 10-year-old vehicles.
However, Parker’s warns that more can be achieved for a car if it is sold on the
open market. A 50,000-mile, five-year-old Mitsubishi Space Star 1.9 DI-D Equippe
can sell for £2,700 compared with £2,000 under the scheme.
Price increases
Many manufacturers are making a loss selling their cheapest models under the
scheme, so some have reacted by increasing prices. The Nissan Pixo had a list
price of £5,995 at the start of April. Following the announcement of the scheme,
however, the price increased to £6,995. Ford has increased prices twice this year.
Get a better deal elsewhere
Buyers can get a 2009-registered Renault Scenic 1.6 Dynamique for £17,910 under
the scheme. However, it could be bought for £10,999 at certain online retailers
such as motorpoint.co.uk, or buyacar.co.uk, without scrappage.
Don't you get the feeling anything politicians get involved in is best avoided?
Andrew
