Consumer mag accuses car makers of cashing in on scrappage

Figures published by Consumer magazine Which? show several manufacturers have increased their prices during the past 12 months and point out that buying a car under the scrappage scheme could leave car buyers potentially no better off than they would have been in 2008.

“It appears manufacturers are inflating prices just when the scrappage scheme requires them to chip in at least £1,000 worth of discount on a new car”. Strong stuff and they go on to give a few examples, the worst offender being the Vauxhall Insignia 1.8 petrol, which cost £17,981 when it was launched in January 2009 and which now has a list price of £20,430. The increase of £2,449 is far greater than the £2,000 which Vauxhall and the Government will split in return for an eligible car being traded in under the scrappage scheme.

Vauxhall, however has given an equally strong response.

“We have made no moves whatsoever to compensate for the £1,000 contribution we make to the programme,” says General Motors UK Chairman and MD Bill Parfitt.

“It’s true that we, along with many other manufacturers, have raised our prices this year, but this was before the scrappage scheme was announced on May 18. In fact, our February 3 increase pre-dated the scrappage scheme by more than three months.

“The only reasons we have raised prices are a severe weakening of the pound versus the euro, and a sharp increase in the cost of raw materials, such as steel.”

In fairness only 3% of its scrappage customers have bought Insignias with the vast majority opting, naturally, for smaller vehicles such as Corsa, Astra and Agila.
It’s not the same with all manufacturers of course with Hyundai, the UK “scrappage kings”, hardly increased their prices at all and Volvo who have actually reduced some list prices.

As always it pays to be on your toes and do your research to make sure you really are getting the bargain you think you are.