Was the car scrappage scheme worth it?

Image of scrappage yard
Scrapped cars, yesterday
"While plenty benefited including, rather obviously, those that got themselves a nice, shiny new car, the scrappage scheme ended with car enthusiasts weeping into their cans of WD40"
  • | by Phil Huff

Car manufacturers are falling over themselves to tell us just what record levels of sales they've achieved every month, with increases of 20% year-on-year not being at all unusual.

Yet it was only a few years ago that the industry was in the doldrums, with annual sales down in early 2009 by around 40% from their 2.4 million peak in 2007. Something had to be done to prop up an industry that was in danger of collapse.

The government's answer was to pay consumers hard cash to scrap their car, on the condition that they bought a new one. Some £400m was allocated for the scheme, which saw car buyers given £1,000 from the taxpayer for their old car while manufacturers discounted their new model by another £1,000.

The conditions were simple, but prevented abuse - the car to be scrapped needed to be over 10 years old, have a current MOT, and have been registered with its owner for at least 12 months.

The result

Image of old and new cars

Scrappage was undoubtedly a success for the motor industry.

Sales immediately went up, with the latter half of 2009 showing a 21% increase over the appalling 2008 figures. By the end of the scheme in 2010, over 392,000 cars had been scrapped and, with that, over 392,000 new cars were sold.

The increase saved hundreds of dealerships. Margins in the industry were tight, so getting more metal out of the door (and then back in again for servicing) made the difference between survival and bust.

Hyundai was the biggest winner, selling 47,000 new cars through the scheme. Fellow Koreans Kia made 33,000 sales, while Ford, Fiat, Toyota and Skoda all made large gains thanks to the government money.

The government also made a handy bundle of cash, despite spending £400m. Thanks to VAT being collected on each of the new cars, an estimated £700m flowed back to the taxman.

The losers

While plenty benefited including, rather obviously, those that got themselves a nice, shiny new car, the scrappage scheme ended with vintage car enthusiasts weeping into their cans of WD40…

I’ve dug into the official data and identified a few noteworthy tragedies…

Ford Fiesta

Image of Ford Fiesta being scrapped

Around 20,000 Fiestas were scrapped, but one stood out more than every other. With just 14,000 miles on the clock, and in near-mint condition, this original model was crushed to save some cash on a new Ford Ka...

BMW 2002

Image of BMW 2002

One of the greatest cars of its era, the 2002 marked the coming-of-age of BMW. Fun to drive, light, agile and well built, it rescued the German marque from the brink of bankruptcy and is highly regarded by enthusiasts. Despite there being just 272 of these on the roads in 2009, the owner felt that £2,000 off a new car was an easier option than selling it for as much as £15,000, if current rates are anything to go by...

Lancia Delta HF Integrale

Image of Lanca Delta

The standard Delta wasn’t that exciting, but once tweaked by the Italian firm's racing department it turned into a rallying legend.

After winning the World Rally Championship six times in a row, the draw of such a hot hatch means you’d need up to £20,000 to buy one now.

Renault Fuego

Renault Fuego

Few cars are as French as the Fuego, with options such as ‘le plip’ (or remote central locking to you and me) and orange fog lights.

Surprisingly, it became the top-selling coupe in the UK in 1981, before fading away to be remembered only by fans of obscure '80s cars.

In 2009 there were just 33 left in the UK, which means the two traded in account for a 6% reduction. Today, there are just 20.

Peugeot 205 GTi

Image of Peugeot 205 GTI

The darling of the hot-hatch world and as iconic now as it was 30 years ago.

Rare as hens' teeth in unmodified condition today, 2009’s scrappage scheme saw 32 of them sent to the crusher, killing off the teenage dreams of many.

Morgan 4/4

Image of Morgan 4/4s

Image: Dave Catchpole via Flickr

In the '80s there was a four-year waiting list for a Morgan, and things aren’t much better now. That explains why you’ll have to spend around £30,000 for a second-hand model today, but doesn’t explain why one model of the world’s longest-running production car was discarded in 2009 in exchange for £2,000 off a family hatchback...

Fiat X1/9

Image of Fiat X19

Who could ever dispose of a Bertone-designed, two-seater, mid-engined Italian sportscar?

Ok, so it’s no Ferrari, but the tiny 1.3-litre engined Fiat was a well-respected roadster that handled sweetly without offending anybody with lairy, tail-out hooliganism. Eleven made their way to the scrapheap, so things could've been worse. Rust has led to many more disappearing, but still 400 or so remain.

Mercedes 560 SEC

Image of Mercedes 560 SEC

A V8-powered stately home on wheels, the coupe version of Stuttgart’s finest luxury car epitomised the '80s.

Big, flash, powerful and thirsty, it was excess at an excessive level, which perhaps explains why three were lost to scrappage. Even now there are few better ways to cross continents.

Fiat 500

Image of Fiat 500

Increasingly rare in the UK, the original Cinquecento was only 20cm longer than the current Smart, yet managed to seat four.

Comfort levels were, admittedly, more Guantanamo than Genoa, but the 500 was always intended for the city - arguably, it's the first true 'city car' - so you can put up with that. One owner obviously couldn’t though, so an original 500 now takes up even less space in the form of a cube.

Renault Clio Williams

Image of Renault Clio Williams

How many cars are engineered by championship-winning F1 teams? Not many outside of the supercar world, but when Renault introduced the Clio Williams they turned up with a monstrously good hot hatch.

Limited in numbers, even when the controversial Williams II and III were released, fans still flocked to the car. Two of these were scrapped, which means there are two people who could have tripled their money on the second-hand market, where they’re coveted by enthusiasts.

That’s just the tip of the iceberg. Hundreds of Audis, Alfa Romeos and BMWs were crushed, along with more than 100 Porsches.

British cars fared badly, with many Austins, Jaguars and Triumphs disappearing, along with more than 150 Minis and a few MG Midgets.

At the obscure end, a Skoda 130, a Peugeot 505 GTi Family and a Mitsubishi Tredia were destroyed. Ford Capris, Honda Integras, Lance Betas and even a TVR S2 failed to survive the scheme.

It could all happen again, too - the mayor of London, the AA and the Sun newspaper have all called for a second scrappage scheme for diesel cars.

With the end of payment protection insurance refunds in sight, retail sales of cars that were propped up by the payouts will drop, while the government is still keen to reduce the environmental impact of cars on the road.

That means there are already calls to bring in another scrappage incentive. If that does happen, we’ll no doubt see countless more classic and future-classic cars destroyed...

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