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The Government’s £300m car scrappage scheme launched last month and has proven to have no real effect after sales figures were released that showed a 24% drop in new car sales.

The Government’s car scrappage scheme provides the consumer with £2000 when they scrap their old car for a new model car. These scheme launched in May and strated hitting road bumps from stage one. There were arguements over costs which lead to Ford holding off on their involvement.

This decrease in car sales means that the UK has seen an overall decrease in car sales for the last 12 months, despite the introduction of the car scrappage scheme. This simply weakens the reports that consumer confidence is improving.

A total of 35,000 cars have been bought through the car scrappage scheme, although it will take some time to be converted into new registration, reported The Society of Motor Manufacturers and Traders. They also said that they believe a large number of buyers are weighing up their options before purchasing a new car. A total of 134,858 new cars were sold last month, with the Ford Fiesta coming out on top.

Only 15,386 of the overall sales were from Vauxhall after they suffered a 40% drop in sales.

One reason for the major drop in sales is down to corporate sales of new cars. Car leasing companies that offer a range of makes, such as Vauxhall leasing and BMW leasing, are reducing the amount of cars they are buying because they are also suffering from the economic crash.

Car leasing companies are finding it difficult because when a consumer wants to get a new car, they rarely consider the leasing options which can generally be cheaper than buying your own car. Plus, with the new car scrappage scheme trying to get people to buy a car, consumer are encouraged to buy rather than consider other options such as leasing.

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