Car scrapping scheme proposed for Australia
March 23, 2009 by George Skentzos
Drivers could be offered up to $3000 to scrap their old cars if a proposal made by the Motor Traders Association of New South Wales is accepted by the Federal Labor Government.
The proposal is intended to remove polluting, unsafe cars from Australian roads, with similar initiatives already implemented in France, Germany and Brazil leading to an increase in new vehicle sales by as much as 10 per cent.
The MTA NSW proposal would see the Australian Government pay up to $3000 for vehicles more than 10 years old, with the cash incentive to be put toward a new car purchase to help stimulate the car industry.
These older cars would then be crushed, permanently removing them from Australian roads – with the Government reminded that the cost of this scheme would be largely recuperated through the inherent cost of GST associated with every new car purchase.
“We are not specifying buy Australian or anything else,” MTA NSW’s James McCall said. “We need to help the industry, including 103,000 small businesses that make a living from the car industry and 318,000 workers.”
The MTA estimates that of the 15 million vehicles in Australia, about half are more than 10 years old and a further two million of those worth less than $3000.
“The key is the grant has to be at least equal to what the owner would get if they traded it,” Mr McCall said. “Our submission asks the Government to set aside a maximum of $4.5 billion, spread over three years, which will be plenty to cover the cost.”
While the proposal has upset some used car dealers, the scheme would be more than welcome for the struggling Australian automotive industry, with new vehicle sales hitting a six-year low in February.
Source: News.com.au
Print it: 
Zorro, thanks for telling us all what we ALL already knew!
AND for confirming my earlier statement that giving loans to those who really can’t afford them, but “hey I wan’t to get the $3000 govt freebee to buy that new car I can’t afford” is not a good idea.
Zorro, stores have sales to move old stock, with the hope that sales on a few items will increase foot traffic and hence potentially increase sales on non-sale items. Where cars differ from general consumer goods is that they last much longer, are pretty much a necessity (every family has one) and they are worth a significant amount of peoples income. People who buy a new TV usually either put the old tv in a different room, so they can be an impulse buy, as the purchase of a new item doesn’t make the old one worthless, nor does it consume the majority of your yearly income. But with the high cost of keeping a car, that doesn’t apply. Someone who buys a car now, might want to buy again in 3 years time if there’s a sale, but only if he/she can sell the old one, because cars cost a lot to buy and keep. If no one buys second hand cars because there’s an incentive to buy new cars, then eventually people won’t buy new cars because they can’t sell their old one. That tanks second hand car values towards the $3k mark, making the cost of getting a new car *higher*. Thats why sales for consumer goods don’t usually impact future sales (in the long term) but this will with cars.
Ravish, its a bit early to say its worked in Europe, its been going for just over 1 month now, and in that first month (which will be the most successful month) sales only went up 20.5%. Thats not a lot of data and not a big success to base a multi-billion dollar program on.
Sorry Zorro, no idea why I pinned that first paragraph to you, I meant Ravish.
This is an excellent idea!
There are so many old and unsafe cars out there. Some are spewing out dirty, toxic fumes. If you have ever driven behind such cars, you would know what I am talking about.
Sure, not everyone who owns a $3K car can afford a new car. But there is a large percentage of people out there with old cars who would get a new car if there is extra cash incentives. This $3000 (or more) cash incentive would certainly give it a BIG push for people waiting to buy a new car.
This scheme would be good for the economy, the environment and the car industry and jobs.
Actually, I take that back. That was aimed at you.
Tom I figured it was aimed at me hehehe…
At the moment you will notice many automotive manufacturers advertising ‘08 plate vehicles (old stock cars!) at substantial discounts. This “sale” happens every year around this time. At the end of financial year you will also find most, if not all the manufacturers having a “clearamce” or “sale” as well. All of this activity is aimed at getting tomorrow’s car buyers into showrooms today, and it works over the long term, hence every year we see the same “sales”.
We probably need to see more detail to fully comprehend the impact on used car values, but as outlined this program applies to heaps of junk valued at 3K or less, which is a very small portion of the used car market and not everyone with a clunker will utilise this scheme.
Brett – you are a donkey, every day car buyers in this country are declined finance because lenders deem they lack the capacity to repay or they have a poor credit history. You need to get off this site and get on with your finger painting.
I’ll ‘fess up. I drive a 10yo Subaru Outback. I intend buying a new car before 30 June. I earn well into 6 figures, so it is not as though I could’t have bought a new car any time over the last few years. So there are drivers like me out there who might be able to take advantage of this scheme. I’d held off buying due mainly to being a tight arse and also not wanting to add to my environmental footprint (I drive less than 15,000 km a year and building a new car far exceeds the environmental damage my Subie does each year). But in actual fact this Scheme will do nothing to make me buy a new car any sooner as a measly $3,000 is less than my current car is worth anyway.
Zorro, personal abuse to those who prove you wrong just shows your small mindedness. I’m sorry if you can’t handle the truth.
Financial experts all over Australia are saying that these schemes, that encourage borrowing, are a silly idea and will have negative long term impacts on the economy and community.
I think it would be better to give them $3000 if they buy an economical new car (less than 7L/100km) with low CO2 emissions.
They really need to get rid of all those clapped out commodores of the road. You stop by a commodore at a set of lights and all you hear is these clunkers clunking like theres a misfire on there noisy waterpumps. Shame to holden for inventing these things in the first place. I wouldnt give em 3 grand for these dunnydores maybe 300 bucks is wat they are really worth.
Zorro,
so there is plenty of choice for cars under 20K is there????
so are you saying we should all drive cars smaller than those that are classified as small????….the light class
what if someone needs a family car??? head towards 40K for a commodore, falcon, accord, aurion sort of vehicle
You do need to spend 25K to get a half decent small car.
sure you will get into a hyjndai getz or barina for sub 20K, but what about those that hold regard for their safety and comfort.
and the reason why what you have to spend to get a car makes a difference is that the more you have to spend, the less relevant $3000 becomes.
also dont forget that you may already get 2-3K if you trade that 10yr old dunnger so at best you are only 1K better off
This idea is dumb,it would get more young people into debt,there plenty of good cars around under $3000,and theres plenty of people who need them.Hows the timing by the Goverment,talking about this the same week the Tara Nano is to be first sold,what are they trying make an future Nano market.
I think that this is a stupid idea as it could end up being a bit like the Baby Bonus. Sure it sounds like a good idea at first
However; like it or not; the only reason some people decided to have a baby was to get the money they don’t/didn’t really want or could afford to have a baby
Not only that but studies have shown that what’s happening with the baby bonus is a number of parents in certain areas etc aren’t spending the money on the baby but on other things – mainly Drugs.. and the same thing could happen with the Cars for Cash plan.
Instead the govt should make it a more of a reward for doing something and not as a reason for doing it. They don’t even have to publicise it the dealers could send the sales order forms into the government and you receive an unexpected cheque in the mail.
Wheelnut,
this isnt the sort of thing that would allow you to buy drugs.
you cant take the homeowner grant and go get off your tits with it.
it would more than likely be absorbed into the economy by the finance company you are using or the dealer itself.
if people need to get drug money by borrowing for a car, they may as well draw it on the credit card directly
Andrew M – You need to re-read my posts, but if you can’t be bothered please allow me to answer your questions.
1. “so there is plenty of choice for cars under 20K is there????” Yes absolutely there is plenty of choice for cars under 20K, in fact there has never been more choice.
2. “so are you saying we should all drive cars smaller than those that are classified as small????….the light class” No. Drive whatever car you like.
3. “what if someone needs a family car???” Refer question 2 and go out and buy one.
4. “You do need to spend 25K to get a half decent small car. sure you will get into a hyjndai getz or barina for sub 20K, but what about those that hold regard for their safety and comfort.” What about the brilliant New Ford Fiesta or Focus, Honda Jazz, new Barina, Astra, Toyota Yaris, Corolla, Nissa Tiida, Micra, Mazda 2 & 3, Suzuki Swift; and, apart from the Barina, I havn’t even nominated any Koreans yet! Most of these cars have a 4 star safety rating and are under or around 20K. Wow!
5. “and the reason why what you have to spend to get a car makes a difference is that the more you have to spend, the less relevant $3000 becomes.” Money is always relevant! If tomorrow you tripped over 1,2 or 3K on the footpath, would you pick it up? Of course! Even though you earn $50K (average) or $100K? Loads of very wealthy families were rorting the 1st homeowners grant by buying million dollar homes in their childrens names, just to pick up the 7K grant. Money is money.
This is a great program that needs to be adopted and implemented as soon as possible. Traffic will flow better with fewer heaps of rubbish breaking down in peak hour, air will be cleaner, less oil leaked onto our roads, we are all safer – there are many many benefits… And here’s the kicker – once it’s implemented, if you don’t want to take advantage of it; then don’t.
Phew… I’m going to bed!
Why don’t hey do something like they do in California. i.e Everytime you fill your car up and you can see/smell the fumes, thats hydro-carbons venting to the atmposhere. I believe in California they have sleeve over the bowser nozzle to stop the hydro-carbons from being vented… If there are 15 million vehicles in Australia, and each of them fill up there tank, that’s a lot of Hydro-carbons being vented to the atmposhere, why can’t this be trapped??
Chit Says:
March 24th, 2009 at 9:58 am
“Realist your a twit!”
You obviously voted for Labor. When I get my car cleaned I’ll be thinking of you.
“Not everyone who has a bomb of a car is a low income earner.”
Most are.
“Yeah we were better off with Liberals, yeah right.”
You’re obviously one of the dimwits who lives in Labor heartland, lives and breathes Labor, thinks anyone who’s financially successful is the enemy, but never realises their beloved Labor doesn’t spend a cent in their area and ultimately doesn’t give a damn about them.
Chit Says:
March 24th, 2009 at 10:19 am
“Mark Greenburg, how do you know? Do you have a CEO detector? By the way there are other jobs that pay a good income, moron.”
Sure, if I was to ever receive a seven figure bonus my first inclination would be to buy Wheels Car of the Year the VN Commodore, right?
Idiot.
What we need is a scheme to scrap all the old, unsafe and polluting cars off the road.
Kool, I luv that idea.
Kool, I luv that idea :).
Realist, your still missing the point dumb ass, go back and read my statement, really carefullly this time.
Zerro, more personal insults don’t make you any less wrong.
Sorry, but you are a total fool.
Any further attempts to squeeze any factual information into your tiny mind are obviously pointless, so I won’t bother.
This scheme is just a silly idea that will do nothing but cost taxpayers more money. This has all the hallmarks of another KRudd failure.
Brett –
Nothing you have posted is factual, relevant or even remotely intelligent. You’re arguments also completely lack substance.
Wait a second, I can hear something, oh wait, it’s your mamma, yes mummy’s calling you, listen, she’s telling you you’re supposed to make things with play-doh, not eat it you silly duffa!! Now run along little one and leave the grown ups to talk…
Zerro, more personal insults don’t make you any less wrong.
Sorry, but you are a total fool.
Any further attempts to squeeze any factual information into your tiny mind are obviously pointless, so I won’t bother.
BK, you’ll find thats because most of time those people don’t service the car!
Zorro,
why dont you check the list price of all the vehicles you listed to be sub 20K spending money material, add the on roads etc, and then come back and tell me how many of them you got wrong
For your other notes 1,2,3 and 5, you totally miss my point.
the more you have to spend, the less likely a measly 1-2K is going to be an incentive
better off buying a 1 year old model with bugger all k’s on it and saving 10K in the process, then you will be saying “what 1-2K incentive”….
Chit Says:
March 25th, 2009 at 2:23 pm
“Realist, your still missing the point dumb ass, go back and read my statement, really carefullly this time.”
I saw you using the words “twit” and “moron”, so obviously it wasn’t constructive.
Tell your local Labor rep that your hero Krudd gave me $950 to clean my $250K car.
My girlfriend also got $950 – which she’ll use as partial payment for her sixth Louis Vuitton bag.
I’m starting to wonder why I didn’t vote Labor all these years…
Andrew M
I said those cars are under or around 20K. And nobody buys a car for list price plus on roads. Nobody. Dealers would love that to happen, but unless Forest Gump walks in there is always, always discounting on the cars mentioned.
An example is the base model Focus lists at $20490 plus on roads and dealer delivery, yet for the last 6 months at least you could buy one for that price drive away.
I do agree with you on a year old car being far better value than a new car, personally I would look for a demo, but as demo’s fall under Used Car legislation I doubt they would be eligible for this proposed scheme, but here’s hoping they are!
Having sold both new and used cars for a number of years I have seen the absolute rubbish that gets traded in, and I firmly believe that some sort of scheme to get these abominations off the road has to be a good thing. If not this proposal then something else workable.
And cheers for a healthy discussion!
I THINK THIS IS A FANTASTIC IDEA LETS HOPE IT GETS PASSED
I read somewhere if you did get the $3,000 you would have to buy a new car or a car less than a year and a half old.
This is a great idea, I need to upgrade my car but wouldn’t buy such a new car. This scheme would probably change my mind.
It will get a lot of higher polluting vehicles off the road. It’s better than than the scheme in Japan where registration cost increases as the more km you drive the car. Have you seen a Japanese website where you can import used cars from them? You can buy a 2004 Mazda xr8 for $12,000 Australian that’s done 40,000km compared to Australia they are $30,000 and all done over 100,000km. But the government wont let you import them unless you’ve used the car yourself overseas for at least 12 months.
Cars in Australia are too expensive that’s why so many people have old cars.
An intriguing approach – but a wasteful idea, especially for those with an interest in older vehicles who would like a parts source. Come to think of it, it is not uncommon for new cars to be discounted anyway.
Here in New Zealand, people simply prefer to drive older vehicles – it is not uncommon for people to still have pre-1990 vehicles as daily transport. If such an approach was considered here the politician concerned would likely be laughed out of parliament.
so what about the penioners who have older cars ,, well maintained never thrashed (unless picked up by some young hoon and driven to death) how can a pensioner afford to bye a new car even tho there is nothing wrong with the old one ,, the new cars these days arnt worth a pice of ….
keep the old ones alive ,, look after ur baby
global warming hoo har,, its just a cycle,, the earth goes through every few thousand years ,,
Steve – “how can a pensioner afford to bye a new car even tho there is nothing wrong with the old one ,, the new cars these days arnt worth a pice of …”
Simple. They’ll do what they have done in the past. They just won’t buy a new car, and keep the old one. It’s not like it will be compuslory mate.
Foward thinking; this is the kind of investment the country needs
Suzuki’s suggestion on this is that it should only be available for small, low polluting cars (coincidentally, they’ve just released a new P.O.S. that just happens to meet these requirements).
Great theory, but what about those of us who (for whatever reason) require a larger vehicle. I’m damn sure their new thing wouldn’t allow me to do what I need (not that $3K would persuade me to trade in my faithful old 45 series); so it’d be just another handout that I miss out on. At least I’m getting KRudd’s $900, I suppose….
The MTA are a bunch of people who are interested in outcomes for themselves. Don’t be fooled by these people.
I think this is a grewat idea. Weve got an old hyndai nearly on its last legs. We are waiting on tax time to get some money to get a new car, then plus this 3 g we can get something desent. However, it may boost car sales, but as said above, what about the wrekers. The repair shops, the people who rely on old car stuff. It is sort of a take from the poor, give to rich scheme. Capitalism at its best.