Scrappage scheme slows fall in car sales

The scrappage scheme has made a “positive impact” on the new car industry after slowing the decline in new car sales.

Over 176,000 cars were sold last month – and 17,000 were registered under the scrappage scheme.

This doesn’t take into account buyers who have placed an order and are waiting for their car to be delivered. In May around 35,000 new orders were taken, and more than 30,000 in June.

Auto Trader found the UK’s 20 most popular manufacturers on have taken 68,752 orders between them under the scrappage scheme so far.

June’s registration figures show a 15.7 per cent drop on July 2008’s sales figure, the Society of Motor Manufacturers and Traders (SMMT) said.

But this was the smallest month-on-month fall since July 2008. And sales increased by 30 per cent from May to June.

The ‘cash for bangers’ car scrappage scheme, introduced on May 18, gives drivers £2,000 off the price of a new car when they scrap a vehicle over ten years old.

June’s sales figures represent the scheme’s first full month in operation.

Could you scrap your car for £2,000? Find out on Auto Trader’s scrappage site

SMMT chief executive Paul Everitt said: “We are now beginning to see the positive impact of the scrappage scheme translate into new vehicle registrations.

“We expect the pace of improvement to increase in the coming months, but we can already see the industry making steady progress on the long road to recovery.”

Ford still owns the biggest market share after selling 16.9 per cent of all new cars in June.

Vauxhall and Volkswagen follow with 11.9 per cent and 7.1 per cent respectively.

Hyundai has sold the most cars under the scrappage scheme with 13,000 orders taken so far – 7,700 orders placed on the Hyundai i10 alone. View the ten best-selling scrappage cars.

RMI National Franchised Dealers Association director Sue Robinson said: “It can take up to two months for a new car purchase to go from the initial order to delivery.

“We expect the full impact of the scheme to be shown from next month onwards.”

The best-selling cars of June 2009

 June May Car Sales
 1 1 Ford Fiesta 9,822
 2 2 Ford Focus 9,268
 3 3 Vauxhall Corsa 7,893
 4 5 Vauxhall Astra 5,662
 5 6 Peugeot 207 4,912
 6 7 Mini Cooper 4,665
 7 4 Volkswagen Golf 4,091
 8 8 Ford Mondeo 3,857
 9 10 Vauxhall Insignia 3,728
 10 13 BMW 3 Series 3,622
View images of the new Ford Fiesta:

Scrappage scheme extended again

The government?s £2,000 scrappage scheme has been extended for the second time.

It will now run until March 31 or when the funding dries up, extending the programme by up to one month.

Funding hasn?t been increased, leaving £70 million ? or 70,000 new cars ? available until the end of March. However with the new ?10? number plate arriving from March 1, this funding could dry up a lot earlier than usual.

This gives buyers more time to take advantage of the £2,000 new car discount offered by the scheme in exchange for a car at least nine and a half years old.

The government said the extra month will also give dealers more time to inform their customers and prepare for the exit phase of the scheme.

Cars bought using the scheme accounted for 17.8 per cent of new cars sold in January.

Business secretary Lord Mandelson said: ?Against the background of the economic downturn, the scrappage scheme has proved a great success.

?It has driven UK car sales, protected jobs and supported the supply chain for car manufacture at a time when this sector needed it most.?

The news comes as January car sales rose 29.8 per cent year-on-year.

The government originally launched the scrappage scheme on May 18, 2009 and the initial funding of £300 million was enough to scrap 300,000 cars.

On September 28, 2009, funding was increased to £400 million, allowing a further 100,000 cars to be scrapped.

A total of 330,722 new cars have been bought using the scrappage scheme so far.

View images of a Morris Minor saved from the crusher:

By Dominic Sacco, senior web journalist

Scrappage scheme confirmed

AppId is over the quota AppId is over the quota Get a great new car deal with Auto Trader

A total of £1,000 will come from the Government and the remaining £1,000 from car companies, with participants being able to buy any new vehicle, including small vans, rather than just low-pollution models.

About £300 million has been put aside by the Government to fund the scheme, which is expected to come into effect as early as mid-May and will last until the grant runs out, thus enabling 300,000 consumers to benefit.

Budget 2009: Your reaction

The AA immediately hailed the announcement, saying drivers would be pleased with a "generous scheme".

But car companies had been hoping that the Government would foot the entire £2,000-per-vehicle bill, while environmental groups had reckoned that those participating would be limited to choosing only "green" cars.

Only too aware of plunging new car sales and car plant shutdowns in recent months, Business Secretary Lord Mandelson and Transport Secretary Geoff Hoon had been pushing for the scheme to go ahead in the face of some opposition from the Treasury.

Today's announcement smacks of compromise between the warring factions within Whitehall, with the scheme only costing the Government £300 million rather than the £580 million first envisaged.

AA president Edmund King said: "Drivers will be delighted that a generous scrappage scheme has been given the green light. The AA first raised this issue with Downing Street last September so are pleased that a scheme has finally been given the go-ahead.

"A £2,000 incentive from Government and manufacturers will help the economy, environment and employment. Cleaner, greener and safer cars will replace some of the older gross polluters. The pot of £300 million could benefit 300,000 drivers.

"In our AA/Populus poll of 17,481 drivers, 28% said that they would consider taking advantage of a Government incentive scheme to scrap older cars if one was available."

Mr King went on: "White Van Man will also benefit from the 'cash for clunkers' scheme as it will cover vehicles up to 3.5 tons.

"Van mileage has grown much faster than car traffic over the last three years so there is a good case for replacing some of the dirtier vans with cleaner models. White Van Man is essential for the economy and is struggling in the current recession. A grant to bring newer shinier white vans onto the fleet would also help the environment, economy and employment."

Mr King added that he was pleased that the scheme had been kept relatively simple without any CO2 restrictions on the type of vehicle to be purchased.

He added: "If every 10-year-old vehicle were replaced with today's equivalent we would see a 30% increase in fuel efficiency and almost 30% decrease in CO2 emissions.

"Today's vehicles are almost twice as safe as 10-year-old vehicles. The consumer will welcome 'Darling's deals for new wheels'."