Scrappage scheme will not have 'significant impact' on nearly new car values - GLASS'S

The guide was countering speculation that the prices being asked for nearly-new cars would appear prohibitively high next to the price of new cars discounted under the scrappage scheme. 

Glass's managing editor Adrian Rushmore said most of the vehicle manufacturers' £1,000 contribution is already on offer to potential car buyers in the form of sales discounts and incentives.

"The manufacturers' scrappage bonus will largely replace these incentives, not supplement them, and today's used car values already take full account of current low transaction prices on new cars.

Rushmore said the scrappage scheme would boost already high demand for new city cars and superminis, increasing delivery lead times.

"Many of these cars are already in limited supply, and the expected additional demand will merely serve to extend delivery lead times. Customers not eligible for the scheme will also find themselves joining lengthening queues, and are therefore more likely to consider a late-used alternative.

"In addition, manufacturers may also seize the opportunity to increase list prices on those models in the highest demand. These factors will conspire to support - or possibly even promote - prices for the nearly-new small and lower-medium car."

These factors all point to the scrappage scheme having very little impact on the used market over the coming months, said Rushmore.

"While we expect values to ease back during the summer months - as they would during any typical year - we do not forecast any further increase in rates of depreciation as a result of the introduction of the scheme."

Supermarket Motorpoint criticised the scrappage scheme for not being applicable to nearly new cars.

"Originally the car scrappage scheme which would have seen the public being able to replace their cars for vehicles up to one year old, resulting in motorists benefitting from savings of almost 50% on UK list price when buying from car supermarkets such as Motorpoint.

"This would have put owning a new car well within the means of the bulk of British buyers.

Now, motorists won't be able to exercise this option and will simply have to pay list price on the car's they buy through the scheme, even though some manufacturers have increased their list price considerably since the end of 2008," it said.

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