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Blog Entries about "scrappage"
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Are new cars overpriced?
Last month in this column, we shared our views on the scrappage scheme and how this had influenced new car sales in the short-term. New car sales volumes are, of course, important in their own right but also exert a crucial influence on the used car market and aftersales. Longer term we believe that new car sales volumes will respond in a similar fashion to the recoveries experienced after previous recessions. One potential obstacle to this recovery is the possibility that new cars have become overpriced - something that What Car? magazine raises in its latest issue.
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Why scrappage incentives are wrong
Former Trend Tracker analyst and now business academic Dr.Michael Wynn-Williams has contributed our latest white paper, Scrappage by Numbers, explaining why importers have been almost alone in benefiting from the taxpayer's investment in resuscitating employment in UK car production. And sad to say, although we like to be right, two reports from the BBC noted by Trend Tracker's Chris Oakham confirm his argument:
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Mashing bangers: the UK's revenue-neutral scrappage scheme
When UK dealers taking part in the scrappage incentive scheme invoice for new cars exchanged for scrapped clunkers, they will find that the £2,000 allowance is VAT-inclusive. Manufacturers passing on the £1,000 allowance they receive from the Government can reduce their input tax on the sale of the new car by £130, leaving a net contribution of £870 from the taxpayer, based on the current temporarily discounted 15% tax rate.