Car Finance – Not Getting Involved in the Politics

Car Finance - Not Getting Involved in the Politics

Some car companies have revealed that they are launching their own scrappage schemes for consumers, separate from the Government scheme which has boosted car sales significantly.

The scheme increased consumer confidence and also gave consumers a boost when it came to car finance, in times where obtaining credit to get products has been increasingly difficult.

The Government’s scrappage scheme, where cars that were 10 years old or older could be traded in for a £2,000 discount of a new car, is estimated to end in October. It is feared that there could be a backlog of consumers who are let down by the scheme as funding for the scheme runs out. The Government is not believed to be planning to re-invest into the scheme once their provisional budget of £300m runs out.

However, it has been revealed that some companies have been launching their own scrappage schemes which will go beyond the Government scheme’s shelf-life of October. Even better, some of these schemes have been revealed to have been offering better deals than the Government-backed scheme that put car sales in momentum.

A fine example of this is Mitsubishi Motors, who recently announced that they were launching a scrappage scheme separately. The company’s financial arm recently confirmed that they had freed up £100m for the scheme which has been gradually gaining interest amongst consumers.

The scheme is open to cars which are between five and ten years old, which can be exchanged for a new car with a discount. In addition, the dealership revealed that they were also offering financial support to consumers with a variety of interest rates and deposits.

The company revealed that over one-fifth of queries for a new car were coming through the scheme, with that number rising. A spokesperson clarified the scheme offered by Mitsubishi, thinking about the success offered by the Government initiative for a while: “To help maximize this momentum, we have decided to launch our own scheme, which means customers can bring cars as young as 5 years to participating Mitsubishi dealers. “

This news comes as Mazda also introduced a car scrappage scheme for prospective customers. Mazda have revealed that they are willing to discount up to £6,000 off the new cars in their range should consumers decide to trade in a car which is more than ten years old. In addition, they confirmed that their offer was open to the public, whether they decided to invest in car finance with the lender or not.

Mark Cameron is a representative for Mazda. He said: “We have taken the opportunity to review various Mazda support allowances to ensure we offer customers the best possible offer for the summer.” It is hoped that as these two car manufacturers offer a new scrappage scheme to lure in customers and prevent a dip in consumer confidence and car sales, more car manufacturers will see the benefit in offering such schemes and the market will become a place where buyers can afford to be picky once again.