When will the scrappage pot run out of cash?

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There seems to be a feeling in the air that the money put up by the government to fund their half of the scrappage incentive will run out soon and the scheme will come to a shuddering halt. Many dealers who have seen some real success are looking at numbers put out by the likes of Hyundai, Ford, Kia and Toyota and believe that it cannot be long before the scrappage money runs dry. One key factor is that the money put forward by the government is sloshing around in one big scrappage labelled pot and whoever takes the most advantage will receive most benefit. There are not fixed amounts for each manufacturer based on what they may have forecasted the likely numbers of cars sold under the scheme would be.

When this kind of confusion starts to rein dealers obviously want to maximise their sales potential and therefore often start to put out adverts telling potential customers that they must get in quick before the scheme finishes. This in turn starts to confuse buyers and can often encourage them to make a buying decision which may ultimately be the wrong one. The truth is that until the actual figures are collated and the people entrusted with the pot tell us we can only guess how long it has left. Many say it could last until December or January as the pace seems to be slowing considerably from the dizzy heights of May and June. It could conceivably last even longer.

As we have commented on many times the big winners are clearly the sellers of smaller cars as demonstrated by the fantastic successes of the aforementioned car makers. However another equally important factor which will govern the longevity of the scheme is supply and many dealers are saying that because certain models have proved so popular due to their price there is danger of severe shortages.

Lastly as we now move into August the month before new plate change and, along with February, the quietest month traditionally for new car registrations we may see further slowdown in scrappage take-up.,

This August will probably be even harder though as many buyers of cars under scrappage will obviously not have bought a brand new car for some time, given that they have traded in a 10 year old car, and therefore many will want the special feeling of having a brand new car with the very latest plate to drive around showing it off to their friends in the first part of September. A lot of people will already ordered their cars for September for this reason and we can expect some unhappy punters should supply issues mean they’re going to be late collecting their new pride and joy.

These factors will all enter the mix and make predicting when the scheme will run out of cash even harder. It may also give us some indication as to what kind of appetite customers will have in the coming months.