Trouble With The Maths!

[Gluestick]

Considering Gordon's latest wheeze, the much vaunted Car Scrappage Incentive which commenced yesterday, no commentators thus far seem to have spotted the huge flaw in the deal!

One buys a new car: and receives a £2,000 discount.

So far so good.

Trouble is, within 12 months that nice new car has depreciated by roughly 50%!

Thus a 1.6 ish whatever TDI, costing say £16,000; less the £2,000 "Incentive": means that after just 12 months you have still lost almost £6,000, despite the scheme.

And with all manufacturers joining in the "Pre-Registered" game to try desperately to boost sales, one might just as well buy a carefully selected one year old car with manufactuer's warranty anyway.

Bearing in mind that your "New" car has inevitably been sitting vegetating in a field anyway.....................

Dear old Gordon's maths never were his strong suit it seems: his forecasts on PSBR (Public Sector Borrowing Requirement) were wildly optimistic every year he was Chancellor!

Not content with trying to seduce young first time buyers into the housing market by offering part ownership deals and the rest, on a asset which on current economic projections will continue to depreciate, now in final desperation he wants to try and induce punters to waste their hard-earned cash on another bad deal!

Car Depreciation:

The site is slow but worth the wait.

[Chancer]

I was back in England recently and saw several ads for the £2K scrappage bonus but all were from French car manufacturers, a learned friend told me that no UK manufacturer (such as there are) wanted to sign up to the scheme as they had to reduce their existing price by £1k before the government would put in their half. Given the low margins on UK car sales this would have been financial suicide

Can anyone confirm this? It seems to make sense as the French government could then apply their existing subsidy to the UK export market and get a nice bung from Gordon to boot.

I bet he didnt think of the cunning French when he introduced a headline grabbing scheme never intended to be taken up [6]

Come to think of it why subsidise the sale of an imported vehicle at all? [8-)]

[Gluestick]

Nissan UK and Honda have now joined the scheme: along with Ford.

Nissan and Honda push the "British" manufacture of their cars..........

Except not all the cars are actually made in Britain! Same with Ford.

I cannot see the sense, either, JR, in providing support to Tata Motors India over Jaguar: and not at all, over LDV which was Russian: and is now Malaysian!

By now, labour ought to have learned the awful lessons from the billions wasted on Leyland, one might have thought.