Car finance scrap emerging

Wed, 01 Jul 2009



According to car finance news today, a spat has broken out between the Society of Motor Manufacturers and Traders and the used car guide Parker’s. The argument concerns the car scrappage scheme .

Parker’s reported that car buyers were failing to save under the scrappage scheme. They reportedly commented that they had: "found a number of examples from different manufacturers where the buyer will end up paying more than the original list price by the time their finance agreement comes to an end. Manufacturers with rates normally around 3.9 per cent and 5.9 per cent APR pushed their rates up as high as 8.9 per cent APR when used with the scrappage incentive."

The guide accused some carmakers of deliberately hiking their APR rates, singling out Renault, Skoda and Peugeot . Immediately, the SMMT came back with a rebuttal. They reportedly commented: "In some cases, where manufacturer profit margins are low, they are not able to offer additional incentives which may still be available on non-scrappage models and this may be reflected in the finance arrangement. The very nature of purchasing goods on credit means that any consumer will ultimately pay a higher price for that product."
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