Scrapper flow

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Scrapper flow

I must admit to being relieved that the scrappage scheme is near the end and that normality should return to the car market. Although it seems to be a win-win situation for owners of older cars and the government, the rest of us don't benefit. Ten-year-old cars worth less than £500 have jumped in value, with some three-year-old models now being worth little more as a trade-in. The government recoups more in VAT than the subsidy on the new vehicle and I'm sure that some manufacturers have upped prices to cover their £1,000 contribution. So what do you think? Was it a good idea to take older unroadworthy vehicles out of circulation or was it a money-making idea by the motor industry?

Asked on 17 April 2010 by R.B., Abbots Bromley

Answered by Honest John

Of course manufacturers have upped prices. Sterling has been devalued by 30% - 50% over the past two years. I estimate that new cars will have to go up another 15% this year to even get close to the prices they are in Europe with the Euro price converted to Sterling. And everything else will also rise, eventually. A currency cannot devalue by 40% and inflation remain at around 3%, can it? Has it ever? Remember the misery of inflation under Labour in the 1970s?

Tags: car prices buying

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