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    Government Scrappage Scheme Means New Car Buyers Are Missing Out

    The new government scrappage scheme allows drivers to trade in their old bangers for shiny new cars by offering a £2,000 discount to anyone buying a new car and trading in their 10-year-old car.

    But according to the Times Online, all is not what it seems to be. Manufactures who normally offer finance of 0% and up are charging customers who go under the scheme up to 10.4% interest. It seems that drivers would be better off ignoring the scheme, selling their old car, then buying another one or just buying the car outright with no finance.

    For example Toyota normally offer finance deals with their rates between 3.9% - 5.9% APR depending on the length of agreement and deposit. But with cars bought under the scrappage scheme they have no option but to accept the rate of 8.9%. This means that not only does Toyota make their money back, but they make a profit too.

    The Society of Motor Manufactures and Trader said ' Unlike most European Scrappage Schemes, which are entirely funded by the government, the UK scheme demands an industry contribution of £1,000 to match the government own input.

    'I personally bought my new car under the scrappage scheme, however, after seeing the interest rates they were charging for £5000, which would have ended up in me paying over £10,000 back, I decided I would just buy the car outright so the discount was kept. I do understand some people unable to do this, so I would think again and keep looking at companies who do offer finance of 0% such as Vauxhall.What do you think? Is it an excuse the Manufactures are using to make more money? Have you used the scrappage scheme? How has it affected you?

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