Nearly a third of new car buyers holding off on purchase in hope of scrappage scheme

Close to a third of those who are considering buying a new car are delaying their purchase in the hope that the government will announce new scrappage scheme-style incentives.

A survey of 6,632 in-market new car buyers conducted by What Car? found that 29 per cent were holding off on the purchase of a new car just in case a new scrappage scheme is announced. It comes following the news from the Society of Motor Manufacturers and Traders (SMMT) that there was an 89 per cent drop in new car registrations during May as dealers across the UK had to keep their doors closed.

But lockdown has also changed buying choices too. Close to 19 per cent said that they have changed the brand of vehicle that they were considering prior to lockdown, while 25 per cent have admitted that they’re looking to downsize their vehicle as well.

The government in France has announced €8 billion in additional funding to increase the subsidies for electric vehicle buyers from $6,000 to $7,000, as well as providing additional funds for EV and hybrid manufacturers. In Germany, VAT for passenger cars has been cut from 19 per cent to 16 per cent while a new €6,000 subsidy has been introduced for cars costing below €40,000.

It’s prompting many to believe that similar subsidies could be announced in the UK too, as the car buying sector attempts to kickstart amid the coronavirus pandemic.

Steve Huntingford, editor of What Car?, said: “Governments across Europe are introducing initiatives and incentives to protect and stimulate the automotive industry in the wake of the Covid-19 pandemic. Despite growing speculation around a green scrappage scheme in the UK in over recent weeks, nothing has yet been confirmed.

“While our research and web traffic data suggests demand is increasing in June, the industry will need support once the initial post-lockdown surge has subsided. Figures from the SMMT suggest we are heading for one of the worst years in history for new car sales, so a Government-backed initiative to encourage motorists to trade-in older, higher-polluting models, could provide a welcome boost to the industry – just as the Scrappage Scheme did in 2009 after the previous year’s financial crisis.”

Read Full Story Click here to comment

FROM OUR PARTNERS