Car Manufacturers Punish New Car Buyers on Scrappage Scheme

Even though the idea of the scrappage scheme was good, buyers that are using the grant are loosing out because car dealers are not offering the same low price deals that they offer to anyone else.

The scrappage scheme is where the government gives you a £2,000 grant to scrap an old car that’s 10+ years old.

Not all customers will be denied the deal. Only people that choose to pay for the car over several years using a car manufacturers loan. New car buyers will be loosing out because car manufacturers who offer loans with rates as low as 4.0%, they are charging customers on the scrappage scheme up to 10% APR. This now means that it would be cheaper to sell your car on the side and get a lower APR.

Toyota is just one of the many manufacturers who are increasing the percentage rates on their loans for their customers that are part of the scrappage scheme. Toyota offers loan deals with annual percentage rates between.9 and 5.9%, based upon a series of factors. However, they have decided now that they are only going offer an 8.9% rate to participants of the scrappage scheme. This means that if you were to buy the new Toyota T2 Avensis, it would cost you £14,565 with the scheme, but once you pay off the loan, you will have payed an extra £2,699 which is almost £700 over the standard retail price.

Ford and Seat are yet another 2 manufacturers that are doing this to their new car buyers. Ford normally offer car buyers a 3.9 APR, however, if you are buying your new car as part of the scrappage scheme, you have to take the 7.9 APR that they have to offer. Seat is the worse of the 3, their loans normally carry a 0 APR, however, if you are part of the scrappage scheme, you will have to have a 8.9 APR.

This problem has occured because car manufacturers are being charged half the bill of the scheme, the other half is being picked up by the government. This has left many manufacturers annoyed and having to try to find the extra cash somewhere else, and it seems that they have found where.

So it sounds that it would be a better deal to sell your old car seperately and not participate in the scrappage scheme. However, there are different options that there rather than buying your own car. Contract hire is a method of owning a car that is often overlooked. By taking out a Ford lease you can get the latest cars at cheaper prices.

So before you choose to be part of the scrappage scheme, take time to consider your other options.