UK 2009 Budget Urging the Country to Go Green
If you have an aging vehicle, you can profit from the recent announcement in the 2009 Budget. The government is promising a bounty of £2000 to any UK resident who chooses to scrap an older vehicle and purchase a newer model. This scheme, which is modelled after a similar one in Germany, will target cars that are nine years old or more.
You don’t have to purchase a brand new car in order to avail of this funding. A used car is also acceptable as long as it is one that was manufactured less than nine years ago and is in good working condition.
The chief supporter of the £2000 car scrapping bounty was Lord Mandelson, the Business Secretary. The issue was hotly debated for months before it was finally agreed upon by government officials and finalized in time for the Budget announcement. This bounty is designed to boost the sagging automotive sector of the economy. As researchers studied the effects of this scheme in Germany, they realized that it had boosted the car sales in the country by 21% in February alone. The car sales in the UK for that same month fell by more than 22%.
Traditionally March has been the strongest month for car sales. However, this did not prove to be the case in 2009 as the report by the Society of Motor Manufacturers and Traders (SMMT) shows. There were only 313, 912 new vehicles registered during March, 2009, representing a fall of 30.5% from the same month in 2008. The line up of new cars on the market for 2009 was not enough to entice interested buyers who are already struggling with higher costs and the prospect of losing their jobs, depending on the sector of the economy in which they work.
Along with getting the £2000 bounty for scrapping their older vehicles, car shoppers can also benefit in lower vehicle prices. In an effort to attract customers and increase their sagging sales, many car dealerships across the UK have slashed prices. It is possible to buy a car at a price far below what it would have been a year or two ago. There has been some concern expressed though that this bounty will result in an increase in the car prices as some retailers try to cash in on the scheme and make a higher profit in an attempt to recoup losses they have incurred in recent months.
The SMMT urged the government to bring in this scheme as soon as possible once it noted the shortfall in the March sales.
According to the chief executive officer of the society, Paul Everitt, “A scrappage scheme will provide the incentive needed and the evidence is clear that schemes already implemented across Europe do work to increase demand. The UK is the only major European market not to implement a scheme.”
The scrappage scheme is likely to see increases in sales of new cars throughout the nation in the coming months and bolster the auto making economy. This is possibly one of the best ways of bringing the country out of the recession that the government has come up with to date.
Tags: interested buyers, prospect, effort, case, 2009 budget, car sales
