Dealers will need to be inventive when the scrappage scheme finally ends

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The cash for bangers scheme has been so successful for many car businesses that there is a feeling amongst some in the trade that after its official demise it simply has to be continued in some form or another. Now as we know Jeremy Clarkson’s best mate Peter Mandelson has repeated the government line that once the cash runs out the scheme really is finished this time, but with more than 30% of new cars being purchased via this route so far this year, it is certainly going to be a big act to follow if manufacturers and dealers are to repeat that kind of success next year. In many ways it might have been better had the scrappage scheme not been extended as the contrast when it really does end will be especially stark given the uneven playing field that 2010 is set to bring.

With the average price of a new car set to rise through VCS (Vat, Currency, Showroom tax) the production lines which have been ramped up in the later part of this year will slow very quickly if these issues are not combated and that is why buyers can expect to see dealers and manufacturers becoming far more creative in marketing their own versions of the cash for scrappers incentive in order to continue trying to sell more cars.

The difference being, of course, that in many ways this will allow them to extend the criteria to more customers than at present and design a scheme around their own product ranges.

The knock on will mean that the trade-ins which, at present, go to the scrap yard could be recycled for further use to buyers who have got a much more limited budget.

Granted it won’t really help the environment but the scrappage scheme has been so viable it would be no surprise to see similarly packaged deals coming to the market.

Maybe if the government recognises the fact that the motor trade is doing its best to take advantage of what has previously been successful, they may come to the party in different ways. Who knows, the government might be able to take a back seat as the car business finds its natural level in the next couple of years.