Tuesday, 8 September 2009

Car scrappage scheme - Good or bad idea - 6 months on

Back in April I blogged some thoughts about the then impending car scrappage scheme . I was one of the more sceptical commentators at the time and despite the obvious registration success that it has been I still have the same reservations now as I did then.

I shared my concerns around the medium and long term effects of the scheme for the motor industry and the wider economy. I also doubted if it really was that much of an incentive, when so many manufacturers were, and still are, increasing their list prices. However many more motorists than I, or most people genuinely thought, have taken up the scheme.

Demand has unsurprisingly been for the smaller cars, with the Korean manufacturers in particular making some significant additional sales. The scheme has without doubt saved hundreds, maybe thousands, of UK automotive jobs which is obviously welcomed as the sector was a very early casualty as the UK economy started to struggle. The August registration figures would have been a total disaster were it not for the scrappage registrations and September will have undoubtedly been saved by it too.

Lots of motorists have also benefited from the joy of getting a new car, which is a treat most of us never actually get to enjoy, without costing the wider tax payer a bean. Thanks to the Government only contributing £1000 of the £2000 grant any burden that the taxpayer might have had to shoulder has been negated by the VAT revenue from the new car sale

So with all this good news am I just being a bit moody as I hadn't recognised the scrappage scheme would be a success?

No. I am genuinely pleased for the UK motor industry and all who work in it for the time the scrappage has bought their dealerships. It has given many groups the space to get their property portfolios and cash flow back on an even keel. My concerns remain about what the real demand for new cars looks like,particularly once VAT reverts to 17.5% again, but I am now more positive about the dealers robustness as they go into life after the scrappage scheme

For an excellent alternative view on Life after the Scrappage scheme read "Scrappage What Happens Next?" from Motor Trade Insider

MOT Test and Tips on Passing First Time

This month approximately 414,000 cars will be due their first MOT’s as they reach their 3rd birthday.
The MOT test was introduced in 1960 by the Ministry Of Transport (hence the name MOT) and is designed to ensure that the vehicles on our roads are safe and in a roadworthy condition. Earlier this year the decision was taken to keep the annual test as opposed to one every two years, once a car reaches 3 years old. Ironically this may help the motorists as although there is the cost of an annual test (currently the MOT test cost for a car able to carry up to 8 passengers is £54) it does provide an early warning of repairs that may be due via the advisory element of the test results

What is included in the MOT Test? VOSA (Vehicle & Operator Services Agency) have an excellent leaflet that covers all the items tested, details on where Testing can take place and how to make a complaint called “Your car and the MOT”

Common Failures Details from the DFT show that during the period April 2007 – March 2008 some 27 million cars had an MOT test, of which a staggering 35% failed first time. This is an alarming figure when you consider that the test is based on determining the safety and environmental impact of your car.
On closer inspection however it shows that many of the failures are more minor and that actually drivers with some simple thought beforehand could prevent failing.The biggest single failure category was Lights at 19%, then Brakes at 18.2% and tyres at 13.4%. Emissions counted for 5.6% of all failures

Tips for Passing Your MOT Drivers can help themselves with a little bit of preparation and avoid failing on silly items.
Lights – check all lights are working, get a friend to help check that brake lights and indicators are working
Screen wash – ensure your washer bottle is full (an empty bottle is a fail)Wipers – check not split and that clean the screen without marking/impairing visibility. Don’t forget the rear wiper if applicable
Tyres – ensure inflated and check tyre depth across the central three quarters of the tyre is above the 1.6mm minimum level. Also check there is no damage or cuts to the side walls or the valves
Emissions – there is some evidence that some engine treatments and premium fuels help keep an engine cleaner though this requires prolonged usage. Whilst perhaps not in the spirit of the test an engine that is up to operating temperature will have lower emissions
Seat belts – smooth retraction and not frayed/ cut

Advisory Notices and Extended Warranties For cars being tested for the first time there is another consideration. For motorists considering purchasing an extended warranty now that, in the most part, their original warranty has expired, they may wish to do so before having the MOT test. An exclusion of all car warranties is that cover cannot be provided for a known fault. If a driver waits until the MOT has been done and has an advisory notice, by definition that becomes a known fault. In the event of a warranty claim a warranty company is able to view, on line, advisory notices and so would probably reject a claim