The benefits of the scrappage scheme

Slideshowbob

The motor industry extol the virtues of the scheme.

However, what is the real effect of a car being scrapped and a new car being rolled out?

isn't alot more waste/energy created?

Are many Irish jobs really created/saved?

Doesn't it really mean more jobs in foreign car manufacturing countries?

Does the Irish exchequer loose out in the lost revenue?

amacachi

More energy wasted and a huge proportion of the money spent on the car leaves the country very quickly. It's a ridiculous scheme.

Red Hand

1. Yes.

2. No.

3. Yes.

4. Yes.

This annoys me. Bill Cullen for instance was on The Frontline one night and he was complaining that young people had no get-up and go and preferred to get things handed to them. Yet, previous to that, he was on the Late Late show complaining about how the new VRT system was awful for Irish workers, even though the amount of jobs created by the car industry in Ireland is tiny compared to the amount of money flowing out of the country back to the car manufacturers.

I've no problem with people buying stuff, but when it's being effectively subsidised, then I do.

RichardAnd

Jeremiah 16:1 wrote: »

1. Yes.

2. No.

3. Yes.

4. Yes.

This annoys me. Bill Cullen for instance was on The Frontline one night and he was complaining that young people had no get-up and go and preferred to get things handed to them. Yet, previous to that, he was on the Late Late show complaining about how the new VRT system was awful for Irish workers, even though the amount of jobs created by the car industry in Ireland is tiny compared to the amount of money flowing out of the country back to the car manufacturers.

I've no problem with people buying stuff, but when it's being effectively subsidised, then I do.

Cullen's comments on the Frontline, whilst they did have a kernel of truth to them, were outrageous. The fact that he thinks he has the right to tell people they should work for free shows just how "mollycoddled", as he put it, his mind is.

ardmacha

The scrappage allowance is less than the government get in tax from the sale of a new car, it is not so much a subsidy as a discount in taxes taken. Since it is aimed at people with 10 year old cars, who presumably are not the type to change their car every year, it is bringing in some tax where no tax might otherwise be collected.

The proposition in Ireland is different than in Germany. In Germany the government get less tax from a new car but hope to benefit the manufacturers. In Ireland the government can give a discount on tax and still collect a significant amount of tax on each car.

gurramok

Its a way of enticing people to take on debt. Most new car owners buy cars on credit, they do not have 20-30k lying around in cash. (lotto winners excluded!)

We had a huge credit bubble(housing and related retail) and that was a way of generating huge taxes. Of course we know what happened when that collapsed.

ei.sdraob

gurramok wrote: »

Its a way of enticing people to take on debt. Most new car owners buy cars on credit, they do not have 20-30k lying around in cash. (lotto winners excluded!)

We had a huge credit bubble(housing and related retail) and that was a way of generating huge taxes. Of course we know what happened when that collapsed.

Which is even worse considering how new cars depreciate so quickly, negative equity all the way

ardmacha

Its a way of enticing people to take on debt.

That's the choice of the individual. Reasonable people just save up and buy their cars that way.

recedite

ardmacha wrote: »

Since it is aimed at people with 10 year old cars, who presumably are not the type to change their car every year, it is bringing in some tax where no tax might otherwise be collected.

As the 10 year old cars are unlikely to last much longer anyway, the govt is effectively denying the full tax revenue to the exchequer in one or two years time, in favour of getting a tiny fraction of that revenue now.

Pretty much in keeping with the usual short sighted vision of politicians who can only see as far ahead as the next election, then.

ei.sdraob

ardmacha wrote: »

That's the choice of the individual. Reasonable people just save up and buy their cars that way.

Of course its their choice

tho it was also their choice to buy overpriced shoeboxes on credit and then it was their choice to moan about "where is their NAMA" once the reality of their decision sunk in

Paulzx

RichardAnd wrote: »

Cullen's comments on the Frontline, whilst they did have a kernel of truth to them, were outrageous. The fact that he thinks he has the right to tell people they should work for free shows just how "mollycoddled", as he put it, his mind is.

Telling people to work for free makes sense to him. He's an employer.

It doesn't make quite as much sense to an employee

Paulzx

Supposedly its keeping jobs in the industry.

The tax revenue that the state is losing out on is probably in some way balanced against the dole it doesn't have to pay out to people still in jobs.

Someone with more knowledge of the figures will probably be able give a more definitive answer

Jaysoose

ei.sdraob wrote: »

Of course its their choice

tho it was also their choice to buy overpriced shoeboxes on credit and then it was their choice to moan about "where is their NAMA" once the reality of their decision sunk in

You never miss a chance to roll this one out, even in a thread about the car industry.

:rolleyes:

ei.sdraob

there are 2 articles here which might be of interest

http://trueeconomics.blogspot.com/2010/07/economics-14710-car-registrations.html

http://trueeconomics.blogspot.com/2010/07/economics-14710-car-sales-vanity-or.html

OMD

ei.sdraob wrote: »

there are 2 articles here which might be of interest

http://trueeconomics.blogspot.com/2010/07/economics-14710-car-registrations.html

http://trueeconomics.blogspot.com/2010/07/economics-14710-car-sales-vanity-or.html

What is supposed to be of interest there? Pretty rubbish articles really. Have I missed something? He is saying that cars that run on alternative fuel (fuel that is very difficult to source) are less popular than cars that run on easily sourced petrol & diesel. No **** Sherlock. Also does he really think people buy more cars in the early months of the year do so out of "vanity"?

recedite

A jan 2011 car has a higher resale value than dec 2010, so it's not vanity, its true economics.

RichardAnd

I can't grasp why people buy new cars at all. If I wanted a new car, I'd buy one second hand for a few grand and pay in cash. Forking out 20k for a car is just madness in my opinion. An uncle of mine is a millionaire a few times over and he once told me he's never bought a under 3 years old

Mister men

Cullen and his ilk are the lowest of the low. Championing of lowering the minimum wage whilst getting a hand out from the average Joe or Jane tax payer to keep his business empire afloat.

Gumbo

RichardAnd wrote: »

I can't grasp why people buy new cars at all. If I wanted a new car, I'd buy one second hand for a few grand and pay in cash. Forking out 20k for a car is just madness in my opinion. An uncle of mine is a millionaire a few times over and he once told me he's never bought a under 3 years old

If people don't buy new at some stage then there's no 3 year old cars for you or you uncle for that matter.

It's a personal choice, and if they can afford new then fair play to them.
I can't wait for the day of it comes that I buy brand new

RichardAnd

kceire wrote: »

If people don't buy new at some stage then there's no 3 year old cars for you or you uncle for that matter.

It's a personal choice, and if they can afford new then fair play to them.
I can't wait for the day of it comes that I buy brand new

New cars are nice but again, I'm not sure they are worth the money when second hand cars can be just as good but much cheaper. My dad bought a "new" car last year that was a year or so old and he got 10k off the price of a new one. The car only have 4k on the clock as well so it was a steal. I don't think the extra money would be worth it for a factory fresh model.

Mister men

Mister men wrote: »

Cullen and his ilk are the lowest of the low. Championing of lowering the minimum wage whilst getting a hand out from the average Joe or Jane tax payer to keep his business empire afloat.

While being paraded on RTE as some sort of business genius.
FF/RTE/<insert vested interest group here>

its always been that way - its legalised corruption