Post Scrappage Rant

DHFrame · 14-06-2011 12:21pm #1

Scrappage? Personally I am glad it is going to be over. People are getting a lot of money for crap at the expense of the Tax payer. I believe this scrappage scheme has destroyed the Private Used Car Market, why buy a 10k 2008 car when you can get a brand new for 15k by trading in your Toyota Starlett with no wheels, jees, when you actually put it like that it does sound ridiculous doesn't it.

Also, private sellers feel a double blow with websites like Carzone, Autotrader and Adverts inundated with Dealers trying to get rid of the petrol cars they cant sell at, knock off 'help! we are going to die' prices, because people availing of scrappage are all buying Diesels, which is a false economy on anything over a 1.4 petrol.

Do we really, really, want to prop up the Dealers in this country?. I can imagine the government are now feeling hurt in the VRT region has no one can sell there cars privately anymore. I want to sell my car in return for going to England to buy a higher spec UK model for the same price, in return, I will put some money in the VRT pot, but I cant, because Borris with his 96 Fiat Panda is looking at a brand new Corrolla with 3 grand off. Goodbye Scrappage, please don't come back.

What a mess. We fail, then make it worse. **** Stains.

EPM · 14-06-2011 12:34pm

How exactly is the scrappage scheme at the expense of the tax payer exactly? Seems to be a revenue generator to me. A lot of those cars would not have been sold in the first place which would reduce the take on VRT.

DHFrame · 14-06-2011 12:35pm

Berty wrote: »

How is the scrappage scheme at the expense of the tax payer exactly? Seems to be a revenue generator to me.

Doesnt the government not pay the VRT? It has to happen somewhere.

stevenmu · 14-06-2011 12:37pm

I would have thought that with all the older cars taken off the road that it's propping up the 2nd hand market too. A lot of 'bangernomics' style cars which people would be buying are simply dissapearing. It'll be interesting to see if prices fall or rise when it ends.

EPM · 14-06-2011 12:40pm

DHFrame wrote: »

Where do the dealers get the money for selling a car 3 grand cheaper/VRT relief? God?

Distributor and a VRT relief from the government. But how many cars would have been sold without the VRT relief? In effect it doesnt cost the government a penny to give the relief as they wouldnt have the intake in the first place.

DHFrame · 14-06-2011 12:44pm

Berty wrote: »

Distributor and a VRT relief from the government. But how many cars would have been sold without the VRT relief? In effect it doesnt cost the government a penny to give the relief as they wouldnt have the intake in the first place.

No but it creates a senario of a lot less income on new cars. I wonder if they have wanted that back another way. That's all I am saying.

EPM · 14-06-2011 12:46pm

DHFrame wrote: »

No but it creates a senario of a lot less income on new cars. I wonder if they have wanted that back another way. That's all I am saying.

But surely more cars were sold because of the deal making up for any potential loss? I see where you're coming thought:)

Eoin · 14-06-2011 12:47pm

I imagine it's also kept a lot of people in employment as well.

knifey_spoonie · 14-06-2011 12:49pm

It aint really costing the tax payer anything, infact it is overall revenue positive.If you take the average price of a new car sold on scrappage say €10,000.

Government scrappage € 1250
Government VAT intake from €10,000 = €1735.54

so
€1755.54-€1250(Gov. addition) = €485.56
This is money that would never have entered the revenue stream as most people who bought a new would have not done so without the scrappage bonus.

Your comment about private sellers getting a double blow is a mute point. The fact is dealers are selling cars to make money, but it is impossible to sell a car above market value. Market value is decided by supply V demand. The fact is there is an over supply of petrol vehicles with a low demand therfore dealers reduce prices untill it comes in line with what joe public are willing to pay. The real fact of the matter is you and the majority of private sellers over value your car and are not willing to sell it at reasonable market value. It all has very little to do with scrappage it got more to do with unrealistic expectations.

DHFrame · 14-06-2011 12:50pm

Eoin wrote: »

I imagine it's also kept a lot of people in employment as well.

True, true, I have just been thinking about staff at dealers, Car Tax generated, Fuel Purchases.... list goes on. mm, rethink alert.

leviathon · 14-06-2011 12:52pm

DHFrame wrote: »

I can imagine the government are now feeling hurt in the VRT region has no one can sell there cars privately anymore. I want to sell my car in return for going to England to buy a higher spec UK model for the same price, in return, I will put some money in the VRT pot, but I cant, because Borris with his 96 Fiat Panda is looking at a brand new Corrolla with 3 grand off. Goodbye Scrappage, please don't come back.

What do you mean? VRT is only applied to new car sales, not second hand. You selling you car privately is not going to add a penny to vrt, it's already been paid when the vehicle was purchased new.

EDIT : Just re-read, sorry yes vrt would be paid on the car you are importing in from england, presume that's what you meant.

ronaneire · 14-06-2011 12:52pm

Rethink alert is right, takes a lot of bangers of the road and is keeping people in jobs.

Antikythera · 14-06-2011 1:23pm

Nothing but a big scam to encourage people to scrap perfectly good cars and borrow money to buy a crappy, overpriced new one and keep up with the joneses. The amount of late model cars I see in the scrapyards is an absolute disgrace.

DHFrame · 14-06-2011 1:25pm

leviathon wrote: »

What do you mean? VRT is only applied to new car sales, not second hand. You selling you car privately is not going to add a penny to vrt, it's already been paid when the vehicle was purchased new.

EDIT : Just re-read, sorry yes vrt would be paid on the car you are importing in from england, presume that's what you meant.

Yes, I could have worded it properly, but rethinking about it, my contribution to VRT by buying a car from the UK is probably not much in the grand scheme. It's all speculation isn't it.

DHFrame · 14-06-2011 1:26pm

Poll results are hidden. Moderator help please.

EPM · 14-06-2011 1:30pm

DHFrame wrote: »

Poll results are hidden. Moderator help please.

Done.

Anan1 · 14-06-2011 1:34pm

I have to agree. Selling more new cars may be good for the motor trade, but it's bad for the country - the money goes straight to whatever country built the car. Far better that they spend their money here, building extensions or whatever.

DHFrame · 14-06-2011 1:48pm

Anan1 wrote: »

I have to agree. Selling more new cars may be good for the motor trade, but it's bad for the country - the money goes straight to whatever country built the car. Far better that they spend their money here, building extensions or whatever.

I think the main problem for me is all the Petrol Cars that are sat on the courtyards. The best that can happen next I suppose is keep the scrappage going and, reduce the price of petrol, and push the co2 tax relief on June 2008 cars to 2007 or something. It's amazing, here in Portlaoise, the Toyota garage have 22 petrol's and no diesels. Whats gonna happen there?

R.O.R · 14-06-2011 2:00pm

DHFrame wrote: »

It's amazing, here in Portlaoise, the Toyota garage have 22 petrol's and no diesels. Whats gonna happen there?

Hopefully they bought the petrol cars at the right price to allow for them to sell them at a low price.

If priced correctly, there is a market for everything. Even a Hyundai Grandeur XG, and I can't think of a less appealing car to try and sell.

Zubeneschamali · 14-06-2011 2:22pm

I'm never going to qualify for scrappage, as I'll never own a car old enough to scrap.

14-06-2011 2:26pm

If the scrappage scheme has kept lots of folk in employment than can we expect more job losses from the retail end of the motor industry once it finishes?

Artificially boosting or propping up a certain sector of the economy is not something I find economically wise unless it is sustainable. Unfortunately the economy as a whole is not recovering so without the scrappage incentive new car sales in 2012 may well be quite poor compared to 2011 levels. Now that's presuming that most of the folks who availed of the scrappage wouldn't have bought a new car otherwise.

Introduce a 75% VAT discount on anything will increase the sales, why pick the motor industry? Plenty of hardware shops, hairdressers, restaurants etc going bust around the country.

jhegarty · 14-06-2011 2:30pm

RoverJames wrote: »

Introduce a 75% VAT discount on anything will increase the sales, why pick the motor industry? Plenty of hardware shops, hairdressers, restaurants etc going bust around the country.

Because hardware shops , hairdressers , restaurants don't pay VRT.

DHFrame · 14-06-2011 2:36pm

How, if any, will it effect the Private car sales market, once the Scrappage is over?

14-06-2011 2:36pm

jhegarty wrote: »

Because hardware shops , hairdressers , restaurants don't pay VRT.

Which is why I said VAT

Quazzie · 14-06-2011 2:39pm

RoverJames wrote: »

Which is why I said VAT

And do you think that reducing VAT to 5.2% would be beneficial to anyone?

Leonard Hofstadter · 14-06-2011 2:42pm

There are several problems with having scrappage schemes:

- they prop up the car trade at the expense of other sectors of the economy, many of which allow more money to stay in Ireland rather than sending it abroad
- they are bad for the environment, as they facilitate the removal of perfectly good secondhand cars from the road
- worst of all, and ironically this is from the point of view of the car industry itself, a scrappage scheme, as any economist will tell you, is designed to brings forward a purchase of a car. A scrappage scheme might give say 10000 extra sales in 2011 but that is at the expense of 2012, 2013 etc. This means that we are putting off the evil day where downsizing and the inevitable loss of jobs occurrs. It is kicking the can down the road and "hoping for the best". Ireland is in even more trouble now than it was when sales first fell off a cliff back towards the end of 2008.

I don't believe in people being bailed out, end of story. We cannot have the capitalist system and free markets etc when things are going well and then all of a sudden decide to be socialists when a business gets into trouble. If we are going to be bailing out wealthy car dealers or property developers etc then they should be taxed heavily on their profits so at least we can afford to fund them when things go bad.

- the scrappage scheme is NOT good for all of the Irish car trade, but only a part of it (the salesman in the main dealer). The scrappage scheme means that people in for example the parts trade, or independent mechanics have a much tougher time as people who otherwise might spend money on fixing their old car decide it's not worth the bother when they can get €1500 for it and have a brand new car with cheap tax and low fuel consumption.

Keeping old cars on the road (once properly maintained, obviously) is better for the many independent garages who look after these cars. Keeping old cars on the road ensures that more money stays in Ireland, and you don't need to be an economist to figure out that this is a very good thing. Consequently, the scrappage scheme is not actually good for the economy at all! It undeniably increases VAT and VRT revenue, but at the expense of what? The jobs lost by those outside of the SIMI network? The other sectors of the service based economy, who are making less money because people have spent their money on a car instead of say improving the house, buying a new TV etc?

Lastly, a lot of the new cars being bought are complicated diesel engines, with turbos, injectors, DMFs, DPFs and God knows what other gubbins that could go wrong.

Now, if you're like me, or anyone else on this forum who knows about cars, you'll know how to look after a modern diesel properly and touch wood the worst that will happen is the DMF. But as we know, most people don't have a clue how to look after cars, and I know of people who just drive around the town all the time but have a diesel because of the low tax etc. So for some people, who do not know how to look after their diesel car properly, the new car will end up costing more and causing more hassle in the long run as it will be less reliable than the older car.

Goodbye scrappage scheme, and good riddance. I hope we never see the likes of it ever again.

R.O.R · 14-06-2011 2:43pm

RoverJames wrote: »

Introduce a 75% VAT discount on anything will increase the sales, why pick the motor industry? Plenty of hardware shops, hairdressers, restaurants etc going bust around the country.

Any idea what the total tax take in those industries is? I'd hazard a guess that it's not approaching that of the motor industry.

I've an invoice for an A4 on my desk - over €11,000 between VAT and VRT - that's almost 30% of the invoice value.

Extrapolate those figures to take in to account all the new cars sold, and you'd find that new car sales make a substantial contribution to the Revenue.

14-06-2011 2:45pm

Quazzie wrote: »

And do you think that reducing VAT to 5.2% would be beneficial to anyone?

See below

RoverJames wrote: »

..........Artificially boosting or propping up a certain sector of the economy is not something I find economically wise unless it is sustainable.................

Our man in Havana · 14-06-2011 2:46pm

The problem is that they make it difficult for the typical banger driver to get rid of his car as he won't have owned it long enough. Getting rid of the time limits would get more heaps of sh!te off the roads for good.

Quazzie · 14-06-2011 2:53pm

RoverJames wrote: »

See below

It is an artificial lift but I think the intention was one of two things.

1. See how bad things were going to get, and try help absorb some of the impact of the crash on a massive industry that hosts many jobs in the country.

2. Soften the crash if it did (which is more obvious now) go on longer than at first predicted.

14-06-2011 2:54pm

R.O.R wrote: »

........
I've an invoice for an A4 on my desk - over €11,000 between VAT and VRT - that's almost 30% of the invoice value............

Someone scrapped something against that A4 did they?

Post Scrappage Rant

Scrappage or no scrappage? 33 votes

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