Scrappage Scheme Will Have Little Influence Say CAP
CAP have stated that the Scrappage scheme announced in the Budget will have a limited impact on both the new and used car markets. They believe that the bulk of new car demand will be for the cheapest, small car market and those people currently running cars of 10 or more years old are likely to require assistance significantly over and above the £2,000 voucher currently on offer.
“By definition they are likely to be sub-prime finance customers. This area of finance provision is subject to the greatest caution among providers. A proportion of those qualifying for the scheme may therefore still be unable to acquire the finance to purchase”
In the case of light commercial vehicles CAP believes that the same financial constraints will exist and is therefore sceptical that many trades-people with 10 year and older vans will switch straight to a new vehicle.
The type of nearly new car or van, which will see the most new car demand, will also see its value reduce. Residual value reductions will therefore be limited to later used examples of the cheapest small new cars and vans.
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