The UK government’s scrappage scheme
seems on the surface a straightforward good news story for the
motor industry, and hence for motor financiers.
But Professor Peter Cooke has
pointed out in these pages before the potential pitfalls which the
industry has not yet seemed to become aware of – not least the
potential loss of aftersales revenue for dealers, as
lovingly-tended 10-year old cars are replaced with new models –
with many of them on extended five-year warranties, to compound the
income that will be ‘lost’ (see Motor Finance July
09).
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He uses the occasion of the launch
of the 2009 BCA Used Car Market Report to inveigh once again
against the siren call of the scrappage scheme, warning that it may
only provide short-term relief to a long-term problem, and that
no-one really knows what effect it will have on residual values
(see Used car finance: a growing market).
Is the industry storing up pain for
itself by pulling forward sales which would naturally have occurred
in some months’ time, were it not for the (artificial) stimulus of
the scrappage incentive?
Perhaps. But with the first reports
coming in that the recession may be easing its grip, perhaps the
scheme was a necessary measure to tide motor retailers over until
‘business as usual’ returns and people once again start buying
cars.
Some parts of the industry, however,
cannot wait for the return of business as usual – especially the
motor industry charity BEN, which has seen its income levels fall
sharply since the recession’s start.
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By GlobalDataThe charity has responded by
starting to look outside its traditional sources of funding to new
areas – and it needs your help.
Some finance providers already
operate performance-related giving schemes, where for each customer
agreement signed, BEN receives a small subsidy; more participants
to this kind of scheme are always welcome.
BEN is also looking to expand its
performance-related giving schemes in partnership with donors in
the fleet, rental and auction sectors.
Diversification is vital for the
charity, whose work caring for vulnerable current and former
members of the motor industry must go on, whatever the economic
weather.
If your company could help BEN, I
urge you to get in touch (via the charity’s website, http://www.ben.org.uk/). It is in
tough times that people’s true colours shine through, after
all.
Jo Tacon
jo.tacon@vrlknowledgebank.com
