Scrappage case study

In his April Budget the chancellor, Alistair Darling, announced a car scrappage scheme in the UK. News of the scheme wasn't a big surprise - it was widely expected by the time of the budget - but it wasn't until after the announcement that the details became known. And while carmakers had been calling for scrappage, some have been quicker than others to introduce it across their range. So how does scrappage work, and what difference has it made?

Officially called the vehicle discount scheme, car scrappage was introduced to encourage owners of cars aged 10 years or more - which tend to be more polluting - to replace them with a new car. Improved technology in the last 10 years means that modern cars are, on average, significantly more efficient, and emit less carbon dioxide (CO2) - a gas that contributes to global warming.

Simply put, the scrappage scheme means that you can get a £2,000 discount on the price of a new car if:
• You're buying a new car from a participating manufacturer
• You own a car or van that was registered in the UK before 1 September 1999
• You've owned it for more than a year
• Your vehicle has road tax and a valid MOT at the time you order your new one
• The vehicle you're scrapping and the one you're buying are both cars or vans weighing no more than 3,500kg (3.5 tonnes)

Provided you stay within the rules, you can simply choose the new car you want, and give details of your old one to the dealer who will arrange for it to be scrapped. In return, you'll get a £2,000 discount on a brand new car!

Aside from the environmental benefits of removing old cars from the road and replacing them with new ones, the scheme is helping support the car industry during the recession. The Government recently announced that 35,000 motorists had taken advantage of the £2,000 discount before the end of May alone.

Dean Watson has first-hand experience of the success of the scrappage scheme. The centre principle for RRG Stockport - one of Toyota's largest UK dealerships - Dean describes the response among his customers as outstanding.

"Toyota has hit the ground running with scrappage," says Dean, who explains that the carmaker waited for full details of the Government scheme before introducing the discount. As a result, he says, "we were able to deal with customers professionally straight from the off".

But for Dean's customers, choosing a car isn't just about scrappage. "We're dealing with scrappage customers exactly as we would with a regular customer. We take our normal approach and sell the strengths of the Toyota, and then they benefit from scrappage as well."

Among the strengths Dean points to are low long-term costs of ownership, reliability, and low depreciation - the AYGO, for example, being twice named by Parker's as the slowest-depreciating car in the UK.

"We very much believe in the brand and the strength of the brand," adds Dean. "With Toyota you can back it up: we really do have the most reliable car, we really do have the safest cars out there."

And, thanks to innovations like Toyota Optimal Drive, the current range suits people looking to keep motoring costs down in the recession. "Everyone's is thinking of emissions, cost per mile, stop-start technology – with all of these things Toyota just seem to have their finger on the pulse and that's what's worked well for us."

Very well, in the case of RRG Stockport. Sales at the centre were on target before scrappage, but since the scheme's introduction Dean has begun to exceed his targets. By the last week of May, he had beaten his target for the month by 27%, and his order book was filling up with cars due for delivery in the months ahead.

Why should Toyota be bucking the trend in car sales? Dean thinks his customers have the answer.

"When people walk through this door looking at scrappage and we ask them 'why Toyota?', they say 'It's because I want a car that'll last 10 years again'."

Toyota UK is a manufacturer of hybrid cars and new cars. If you're interested in Toyota, its cars, technology or ideas, why not visit Today/tomorrow - the official blog for Toyota UK? We've got a team of writers bringing you regular updates on Toyota's cars, including exclusive coverage of soon-to-be released models like the next- generation Prius and the ground-breaking technology behind them.