Scrappage scheme = rising used prices - Why

[obi_waynne]

Why do you think the scrappage scheme is causing used car prices to rise?

The more you think about this one the more interesting it gets.

At first thought you would imagine that all sub £2000 cars prices would rise as they are now worth £2000 in the scrappage scheme but one should quickly dismiss this notion as you need to have owned the car for a year and people will not be buying "old bangers" to trade in.

I can think of 2 main reasons which I will share later but I'm sure you will all have some interesting opinions on this topic.

Discuss....

 

[pgarner]

the main reason i see is the fact so many cars are being scraped as they are worth more than the couple of hundred they would get for a private sale. because of this there are less used cars - supply and demand

 

[lutonmatt]

agree with pg
reason 2nd hand motors have gone up are cos so many have been scraped and with another 100k going as well on top of what has gone there will be less cars

plus there are so many programs on tv and ads in papers saying to get a cheap motor go to a auction
that makes the cars on a forcourt go up as the trade has to fight the pubic for motors and the money they make from them has gone down so car prices on forcourts goes up

then you have the people that can not aford to scrap there car in to get a new one who are keeping it and more people do that less cars go for sale

so end of the day the cars are just not out there to buy and the ones that are are going for more money

 

[dpsubaru]

agree - demand and supply.

But my old man was at the auction a couple of weeks ago and loads of cars but no buying as the reserve prices were all too high. The dealers (most vehicles coming ex Arnold clark and the like) are just asking for too much for them.

Note that the scrappage scheme in USA is now coming off the rails, as it has now finished new cars sales have plummeted.

 

[obi_waynne]

The way I see it is this.

People who would have bought a new car are hanging on anyway keeping their car a bit longer. Its still too new to be worth trading in under the scrappage scheme.

People who would have bought a fairly modern used car are buying new using the scrappage scheme taking more used cars out of the market.

People who still can't buy new with the scrappage scheme are looking for quality used cars increasing demand for the used cars that are left.

Fewer people bought new cars last year so there are less cars out there to buy anyway.

The winners in all this are.....? That is a tough one. I suppose main dealers are shifting stock which helps them. I can't really see any other winners can you?

DPS - do you know what has happened to the US used car prices when the scrappage scheme stopped?