The scrappage incentive scheme announced as part of this year’s Budget will have little effect on the value of new and used cars, experts have predicted.
Commentators had warned that the scheme – which will see drivers who scrap their old cars given cash towards a brand new model – would make nearly-new cars seem prohibitively expensive.
But valuation company Glass’s said this was unlikely, as many drivers who are in the market for a nearly-new car would not qualify for the £2,000 bonus in the first place.
Adrian Rushmore, managing editor at Glass’s, said: ‘The majority of consumers already interested in purchasing a nearly-new car will not be existing owners of cars 10 years or older, and will therefore not be eligible for the scrappage bonus. For this reason demand will not switch from late-plate to new vehicles, harming late-plate values.’
Vehicle valuation specialists at CAP also said the scheme would have little impact on new and , but claimed this was because consumers running cars more than 10 years old are likely to need ‘significant finance over and above the £2,000 voucher.’
‘By definition they are likely to be sub-prime finance customers,’ a CAP spokesperson said. ‘This area of finance provision is subject to the greatest caution among providers. A proportion of those qualifying for the scheme may therefore still be unable to acquire the finance to purchase.’
Both CAP and Glass’s predicted that demand for new will increase when the scrappage scheme begins in May, which could lead to a drop in the value of nearly-new examples.
For full details, and to find out if you qualify for the £2,000 bonus, read our guide to the car scrappage scheme.
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