Other makers were accused of sneaking in list price rises to cover the cost of their contribution. An investigation by What Car? in 2010 found several sharp increases that more than wiped out the scrappage savings, such as a “staggering hike” of 32.6% for a Ford Fiesta. Ford claimed it was due to exchange rate fluctuations.
Parfitt explains: “There’s not a huge amount of profit in a new car, but generally you keep a bit of margin back to give low-rate finance, free servicing or some other incentive. You couldn’t do that and give the £1000 for scrappage, so some people had to move the money about a bit.”
Extending the success
By the summer, it was clear that the scheme had been a success, with applications peaking at 50,000 for the month of June. The SMMT and Parfitt went back to the government and suggested they might want to grant an extension. Parfitt says: “We asked Mandelson and he said no, there was little chance of that. And then, without telling any of us, he announced it at the Labour Party conference! I didn’t blame him.” The extension gave another £100 million of government money to the scheme – enough for 100,000 more cars – and would now make newer cars and some vans eligible to be scrapped.
While individual companies had differing results from scrappage, was it considered a success overall? A total of 392,227 cars were sold through the scheme. “It was good for us, obviously, but it also dramatically changed the shape of the UK car park and got people into cleaner, safer cars,” says Willcox.
What would have occurred without it? “Across all of the franchises, many hundreds of dealers would have gone into liquidation,” says Parfitt. “A number of component suppliers would have gone to the wall too.”
Everitt concludes: “The scrappage scheme provided people with permission to spend. Despite the financial turmoil, there hadn’t been massive job losses at the time and people were just too embarrassed or frightened to spend their money as it seemed reckless. Scrappage gave them a reason to buy a new car.”
Driving the scrappage star
It’s easy to see why a scrappage i10 for £85 per month was an attractive proposition for drivers with a car older than 10 years, especially if there was an impending MOT or pricey service due. The little city car had five seats, air-con as standard, £30-a-year road tax and a five-year warranty, all of which made motoring costs more predictable.
The entry-level Classic we’re driving here was the most in-demand car in Britain at the time, with a six-month waiting list for one in non-metallic red, which was the only ‘free’ paint option. Most buyers stumped up the extra few quid per month for a metallic finish and an earlier delivery. Some cars were brought in with the older, wheezier 1.1-litre to ease up supply and sold as a special edition, but this car has the far newer and more powerful 1.2 Kappa engine, with 77bhp.