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Scrappage - a chance to test your sales prowess

So, the baby we have been expecting for so long has finally been delivered into our world.

How many of us can say the scrappage plan before us in its detail is what we expected? How many of us at this point can even say we know what we will be dealing with in a little over a fortnight’s time? And critically, how many dealers are happy with having to nursemaid the, to quote Shakespeare, the “mewling and pewking” child?

One dealer group boss said to me the day after Darling’s announcement, that while they were outwardly positive about the scheme, there were serious concerns within their organisation about how scrappage would work for them.

Cynically, this dealer and a growing number of industry figures are beginning to acknowledge that the VAT take for the Government from the anticipated surge in new car sales would line Darling’s rather empty pockets, exceeding the £300m state contribution.

There are serious questions that as AM goes to press – and the countdown to scrappage gets underway – remain unanswered:

• how will the dealer be recompensed for new cars sold under the scheme
• will manufacturers reduce the margins on cars to pay for their contribution – will they be allowed to
• how long will the dealer have to wait for the scrappage contribution
• what will be the administration process involved for a dealer taking a scrapped car and how long will this take per vehicle?

And, what seems to have gone unacknowledged is the fact that the people targeted by the scheme are unlikely to have the money sat in a bank account to make up the shortfall between the scrappage ‘deposit’ and the remaining price of the new car.

Assuming the customer is willing and able to make the leap from being a driver of what is being referred to widely as an ‘old banger’ to a new car , like nearly everything in these recessionary times the success of the scheme will revolve around the consumer’s ability to get credit. If you drive a 10-year-old car there are likely to be two reasons for this: you love it or it’s what you can afford. And there’s the rub (more Shakespeare).

Let’s be prepared for the scrappage scheme to have a lot less impact than in Germany (so often cited as the model for a UK scheme), but for it to provide an excellent sales tool for dealer sales staff.

The myriad of manufacturer scrappage related schemes being announced now is adding to the confusion and consumers will be coming in loaded with information from now onwards.

On the front line, dealers will have to interpret this and seize the opportunity using all their business acumen to get the best they can from it – in other words a skill they are well versed in already in this tough market.
 

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