As for which vehicles are the most clunked and the most purchased, new top ten lists have appeared that show that Ford is winning both sides of this race. The most-traded in vehicle is the Ford Explorer. Six of the top ten guzzlers that are now biting the dust are Ford Explorers (MYs 1994-1999). The most popular new car to buy is the Ford Focus, with the Honda Civic, Toyota Corolla, Toyota Prius and Ford Escape rounding out the top five.
America has just started our Cash For Clunkers experience. But European countries have been working with similar schemes for a while now, and two new press releases hint at a possible future for the U.S. First, SaveMoneyOnCars is telling people who want to buy new cars but don't have a qualifying clunker to trade in that they should sell their car for parts and buy a nearly new (less than three years old) car. Second, Glass's is calling on "the Government to extend its Scrappage Scheme at least until next summer in order to avoid a very significant fall in new car sales and a consequent collapse in revenues for car manufacturers and retailers." Might a similar call rise up in the U.S. once the euphoria dies down? After all, if Mad Money Jim Cramer is a fan of C4C now, how long can it go on?
[Source: AP, Yahoo!, SaveMoneyOnCars.co.uk, Glass's]
Photo by dno1967. Licensed under Creative Commons license 2.0.
The Top Ten Cash for Clunkers Trade-Ins:
- 1998 Ford Explorer
- 1997 Ford Explorer
- 1996 Ford Explorer
- 1999 Ford Explorer
- Jeep Grand Cherokee
- Jeep Cherokee
- 1995 Ford Explorer
- 1994 Ford Explorer
- 1997 Ford Windstar
- 1999 Dodge Caravan
The Top Ten Cash for Clunkers New Cars:
- Ford Focus
- Honda Civic
- Toyota Corolla
- Toyota Prius
- Ford Escape
- Toyota Camry
- Dodge Caliber
- Hyundai Elantra
- Honda Fit
- Chevy Cobalt
Nearly new cars offer best value for money over Scrappage Scheme
Don't have a car which qualifies for the Government's Scrappage Scheme? Don't fret, if you opt to part exchange your old vehicle and buy a nearly new *vehicle instead you can save loads more.
While a nice £2,000 deduction from the RRP price of a car sounds good, new cars plummet in value as soon as they hit the tarmac losing on average half of the value of the vehicle within three years. Most dealers would expect to make generous discounts off the list price and research has already shown the scheme in some cases is not the best deal for consumers.
With the Scrappage Scheme money expected to run out long before the official close in March, many customers could find that they are back in the real world, buying cars without Government cash.
In fact it has been suggested that the funding for the scheme could run out as early as October, shortly after the new 59 plate comes out, a prime time for buying new cars.
Even with smaller cars, which are the most likely to make economic sense to buy under the scheme, it can still work out a better deal to sell your used car and buy a pre-registered or nearly new one instead, leading car deals website, SaveMoneyOnCars.co.uk advises. Taking an example, one of the most popular cars bought under the Scrappage Scheme is the Kia Picanto. This car is available for £4,495 under scheme. However if you opted to buy used a 2006 registration Kia Picanto with a measly 16,000 miles on the clock is available from £2,999!
Or take the Ford Fiesta, available to Scrappage customers for £8,595 for the basic model, but available on SaveMoneyOnCars.co.uk for just £7,999 for the top of the range Zetec, 2008 registration with 23,512 miles on the clock.
As a final example the Vauxhall Astra Life 1.4 I available for £8,495 under the Government Scheme. Alternatively you could opt for a 2007 registration Astra Energy 5dr with 34,000 miles on the clock for £6,999.
On top of this, factor in the trade-in value for your old car and savvy car buyers who forego the Government cash could be laughing all the way to the bank.
Marketing Manager, Richard Lawton says: "Consumers should research the market thoroughly rather than assume that the Scrappage Scheme offers the best route to buy their next car. They could find better deals by opting to buy a nearly new car instead.
"Using a website like SaveMoneyOnCars.co.uk allows car buyers to check thousands of cars from main dealers, brokers and car supermarkets in one fell swoop."
SCRAPPAGE SCHEME MUST BE EXTENDED TO AVOID "SUDDEN AND DAMAGING" FALL IN NEW CAR SALES
Glass's is calling on the Government to extend its Scrappage Scheme (*) at least until next summer in order to avoid a very significant fall in new car sales and a consequent collapse in revenues for car manufacturers and retailers.
With Scrappage Scheme registrations currently running at around 13,500 per week, it is estimated that the Government's allotted funding could run out as early as October 2009, well in advance of the very earliest forecasted rise in consumer confidence. The immediate outcome, says Glass's, would be to plunge new car orders to levels seen in the fourth quarter of 2008, with little prospect of an improvement until well into 2010.
Glass's points to several factors that will combine to further depress consumer demand after the current Scheme ceases. In particular, it highlights the return in January of the 17.5 per cent rate of VAT, coupled with growing public awareness of rises in new car list prices amounting to around 7 per cent on average so far this year – made necessary by the falling value of the pound against the euro. Consumers may well baulk at the higher prices, it suggests, delaying any recovery still further.
"The Government should urgently re-evaluate the planned discontinuation of the Scrappage Scheme in order to avoid a sudden, pronounced and damaging fall in business," comments Adrian Rushmore, Managing Editor at GlassGuide.co.uk. "Consumer confidence will continue to be at a low ebb at least until next summer, and without the contribution of Scrappage sales, the new car market will rapidly fall to the levels seen during the last recession, when around 1.6 million cars were sold each year."
Rushmore says the profitability of scrappage sales for dealers and manufacturers should not be underestimated. "Retail sales generated through the Scheme often provide a better margin of profit than sales to corporate fleets. Its absence would, therefore, be felt in two ways: a loss of sales, and a loss of the most profitable sales."
Glass's says dealers throughout the UK want the duration of the Scheme to be extended, and the definition of what constitutes a 10-year-old car to be broadened to cover those vehicles registered on or before 28 February 2000 (V-plate). The company says there is a strong case for the Scheme to apply to vehicles that have no MOT, provided they meet the age criteria. To maximise the benefit, many dealers are also calling for the VAT increase to be deferred until later in 2010.
"A continuation of the Scheme can be a win-win for all parties," adds Rushmore. "The Government's existing contribution of £300 million is being offset by the additional VAT revenues accrued, so extending the scheme need not hit the public purse. Meanwhile, the new car market would gain vital support until the beginning of a wider economic recovery, rather than being returned to the perilous position of late 2008.
"For dealers and manufacturers alike, it is an opportunity to move out of a loss-making situation, with the knowledge that virtually all the Scrappage business is being done with customers who would not otherwise have considered a new car purchase. Unlike other scrappage schemes operating across Europe, there is little or no prospect of our scheme 'pulling forward' new business, only to suffer an immediate decline when it is withdrawn, and the used car market will be similarly unaffected."