Is the UK scrappage scheme a false economy?
As the UK scrappage scheme comes into play there is much information and misinformation in the marketplace regarding the benefits of a potential £2000 discount on a new car. However, the revelation that some new vehicles lose up to 65% of their value within the first three years has made many car owners think again.
Figures from stockbroker Brewin Dolphin show that one third of the value of a new car is often lost in the first year, rising to 40% in year two and between 50% and 65% in year three. The research has cast further doubt on the value of the forthcoming scrappage scheme which will see substantial discounts handed out in exchange for scrapping old inefficient vehicles. So what are the options available to UK drivers?
The discount available from the government is only valid on a selection of new cars and it may actually make more financial sense to acquire a one-year-old car which could have fallen in value by around 30% in the first 12 months. To give an example, a 30% fall in the value of a new Vauxhall Corsa equates to around £3500 against a potential £2000 discount if you acquire the car from new after scrapping your old vehicle.
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