BMW Scrapping incentive!

[Ollie_bwoii]

If you own a car that is ready to be scrapped then you are most likely not going to be able to afford a new car!

Click Me

[GrindCulture]

Yawn, you can't honestly tell me that the cost and emissions produced by scrapping old and producing new cars is less than our 20 year old cars? They're just trying to use the environment to guilt people into buying new cars on the premise they're saving the world.

[djk]

This is what I was just on about on another thread - it's absolutely scandalous and cretinous that such an idea is even being given credence by media outlets, let alone being heard by governments. It makes me so f***ing angry that people use the short-sightedness of the public at large so cynically for their own ends - this has nothing to do with environmentalism, and is exactly the sort of thing that gives capitalism a bad name. This sort of thinking is fundamentally corrupt and intensely damaging.

[richard-the-nutter]

fact is the market is saturated here in the uk, everyone who wants a car has got one!

[Bob_S]

2.5 bags to scrap a car? what if I scrap 3 does that mean I get 7.5 bags?

[fuzzy]

theres a recession on, the government cant afford this.

[e30bmlover]

my uncle came over from berlin at the weekend and told me the same! apparently it is also worked out on milage too... different coloured discs are issued for vehicle class... a red one means its going to be scrapped... the rest i cant remember.

[richard-the-nutter]

lets all get into to some more lovely debt, thank you governement

[paulmitchell1984]

so its top help the enviroment...what do they do with the scrap cars? surley the machines equipment they use will be harming the enviroment etc.

Cant see this workign tbh especially witht the financial situation.

[Martinaston]

The idea is to get all that new money they just printed into circulation, If your not indebted to them they have nothing to govern.
Guess we should expect more crap like this in the near future, oh wait......its already here

[Morat]

The correct way to look at this is not "We're giving you 2500 Euros"
but
"We'll replace your perfectly good old car with a new car and a large debt"
The fact that the debt is 2500 euros smaller than it would be in "better" times merely reflects the desperation of the manufacturers.

[SUMPCRACKER]

They think we are all stupid.
They are wrong,
Its just most people.

[Mox3d]

I want to know where the source where this money is coming from.

[Morat]

BMW I guess - its just a discount with a fancy wrapper. Its a very common ploy in IT hardware "£200 off your new switch if you bring in a competitor's old model" etc etc

[barryj]

To understand why this tactic is being considered you need to understand the economics of what is happening.

The banking crisis primarily began because housing prices were being leveraged too much, this was in part allowed by the de-regulation of mortgage lending. This has left the bank with what is being called "Toxic Debt" they know that they cannot collect on these and against this back drop they will not lend as they have no cash flow. There are other reasons but its all about things (mortgages, shares etc....) being leveraged too far beyond their actual value.

This has frozen the credit system, people are putting money aside rather than spending and this is bad for the economy. The reduction in the interest rate is being made for 2 reasons 1) to encourage spending from people who's mortgages are reducing 2) to discourage people from saving.

The only two places that can realistically inject the required amount of cash and get the banks lending again 1) The consumer through spending 2) The Government by underpinning (buying) the Toxic debt from the bank to start cash flowing into loans (if people start spending again the loans that the banks have to industry do not go toxic).

The £2500 for scrapping a car is to try and stimulate people who have savings or can still borrow to spend, and I will tell you why............using simple numbers.

If a car cost £20000 and the Government donate £2500 then the buyer stumps up the other £17500 and £20000 flows into the system. Nett cost to the Government £2500.

Here is the thing though, the £20000 needs to be pumped into the system anyway (and will be) either this way or through the banks to start loans flowing again, so if this cant be achieved then the whole £20000 will have to be injected from the Government coffers.

Nett cost to the government £20000

This then means that another £20000 will have to be added to the UK debt to balance the books and that costs a lot of money in interest.

You cant totally blame the government for this, they de-regulated the mortgage system to make it easier for people to buy a house and it has been abused (yes they chose to ignore this). The private mortgage consultant did not care if the loan that he was offering could be paid or not as he was just making a quick £5k and passing the loan on to an underwriter, who also did not car as he was making a quick £10k by selling the loan onto a hedge fund manager.

This is what ultimately fucked it all, the American Government have just passed a Bill allowing Trillions (yes that is an amount!) of Dollars to be pumped into the banking system reducing Toxic debt to the point that the banks will lend again. They have no cap on the amount it will simply be pumped in until the system un-freezes.

You will know when this has happened as share prices will begin to recover about 6 months before the system rights itself.......................given this we are at least 6 months away from a recovery as prices are still falling. The recovery will be V shaped (steep decline and steep recovery) and this brings some real issues as for instance when the recovery starts companies will have cut back to far to be able to quickly react to the sudden demand this will slow recovery! Its a real double edges sword and this is only one of the major issues.

One thing I will say, although they have not acted fast enough and they still havent got the public realization of just how much they are going to have to pump in the Government are finally reacting with the correct (and only) answer (in my opinion!).

One last thing, a market analyst who was one of the very few who correctly predicted almost every aspect of the current crisis has just come out and said he believes that we are virtually at the base of the negative side of the V and should start seeing signs of a recovery.

[Morat]

Stuff we all know

Or you could take the other view which is that the financial system is designed with the banks at the top and the rest of us at the bottom. The banks got greedy and over exploited the consumers to the extent where they couldn't keep up their payments.

Personally I'd let RBS and HBOS die. Let HSBC take over more market share and use the Halifax as a fully nationalised government bank used as a macro-economic tool for promoting government policy in whatever areas need more growth (R and D, Education, Infrastructure projects, whatever).

grrrrrrr. burn the bankers!

edit: BTW, the government has no coffers. ALL government money is OUR money which has been paid in taxes. Yes, the more they pump in to the banks to save their overpaid, arrogant, fat waffly arses the higher taxes will have to be for a generation to come. Seriously.

[barryj]

Where in my post did I say "Stuff we all know"? I just can't find it so I am not sure what you are referring to.

We all got greedy, rising house prices were great and people re-mortgaged against them to fund more lavish life styles.

The financial system is far too complicated so although a valiant effort your over simplistic solution is not viable. For instance a lot of the money used to run the UK financial system is actually controlled by organizations outside of the UK (that is true of all countries) you can't dictate that they buy into a Government controlled banking system.

We also need to keep in mind that a non Government controlled banking system has been seen as a good thing for as long as banks have existed, times have only been tough for the blink of an eye and we think its time to turn the whole system on its head.

Once recovered we all need to learn from the issues that over leveraging the financial market has caused. Did we all really think that all the money created in a rising housing market was real? If a £10 note turned into a £20 note overnight I think we would all find it more than a little strange...............................

Edit, just saw your point about the government coffers. To answer it think of a company with share holders. You buy shares at £1 each lets say 1000 shares. If the company makes £10000 and their are 10 share holders they do not each get £1000 they get a dividend on the earnings.

The money that the company has in its "coffers" does not get distributed to the share holders.

We are shareholders in the UK and have invested in it with tax money, the difference is that the UK is a non profit making organization so no dividend it released in monetary terms to the share holders. Its released via services instead, if the Uk is better off we get better services if worse off they get worse.

Therefore the money is not ours, its administrated by an elected body and released as a dividend as services. What gets peoples backs up is that we have to be share holders by law rather than chosing to buy shares in a company that interests us, but hey thats just life its why we have a health service etc.....

I am not trying to answer any frustrations with the current situation but just trying to put a reasoned back drop to it.

[BadMoonRising]

So If I bought any old car for as cheap as possible. Say £100 banged up old Fiesta I can 2k off a new car?

[Mayze]

So If I bought any old car for as cheap as possible. Say £100 banged up old Fiesta I can 2k off a new car?

This had occurred to me as well if I was German and in the market for a new car this is what I would do.

[Morat]

Where in my post did I say "Stuff we all know"? I just can't find it so I am not sure what you are referring to.

You didn't. I'm being a geek. Sorry for misquoting but I felt you weren't really saying anything new. But lets debate instead.

We all got greedy, rising house prices were great and people re-mortgaged against them to fund more lavish life styles.

Not everyone bud, not everyone. Only the people too stupid to realise what was going on.

The financial system is far too complicated so although a valiant effort your over simplistic solution is not viable. For instance a lot of the money used to run the UK financial system is actually controlled by organizations outside of the UK (that is true of all countries) you can't dictate that they buy into a Government controlled banking system.

I wasn't. What I was saying is that I feel no need to support failed banks. Keep the good ones, and run the ones that we own for a profit to try and recoup some of our (really bad) investment. The failed banks need no more support than miners, fishermen, steelworkers, or in this case car manufacturers.

We also need to keep in mind that a non Government controlled banking system has been seen as a good thing for as long as banks have existed, times have only been tough for the blink of an eye and we think its time to turn the whole system on its head.

I don't want a government controlled banking system. I'm not in favour of total de-regulation, but nor am I a believer in big government.

Once recovered we all need to learn from the issues that over leveraging the financial market has caused. Did we all really think that all the money created in a rising housing market was real? If a £10 note turned into a £20 note overnight I think we would all find it more than a little strange...............................

No we all didn't. Seriously, anyone who remembers 1991/2 has seen all this before, maybe not as bad, but house price crashes are nothing new.

Edit, just saw your point about the government coffers. To answer it think of a company with share holders. You buy shares at £1 each lets say 1000 shares. If the company makes £10000 and their are 10 share holders they do not each get £1000 they get a dividend on the earnings.

Err no. Just no. The government is not a for-profit organisation, your analogy fails.

The money that the company has in its "coffers" does not get distributed to the share holders.

Coffers was your word....

We are shareholders in the UK and have invested in it with tax money, the difference is that the UK is a non profit making organization so no dividend it released in monetary terms to the directors. Its released via services instead, if the Uk is better off we get better services if worse off they get worse.

You really are neo-con economist!

Therefore the money is not ours, its administrated by an elected body and released as a dividend as services. I am not trying to answer any frustrations with the current situation but just trying to put a reasoned back drop to it.

This is not an investment, it is taxation - there is no choice involved.

Anyway, in your free market nirvana why should failed businesses be bailed out by the tax payer? Surely this is the sort of thing that happens in an anti-competitive and centrally controlled economy?

You also fail to address the fact that the banks created a lot of this hole for themselves by trading derivatives to each other that turned out to be worthless. House prices rose on the back of cheap credit - but where did the capital come from? Essentially the banks just made it up on false valuations and over inflated profits. They don't have anyone to blame but themselves for this one.

[barryj]

I am not drawing conclusions just stating the facts as I see them, I never said that failing banks should be bailed out just that they would be bailed out.

I still believe that its the fault of anyone who was greedy whatever capacity they were in, I wasn't greedy and can still afford my Mortgage because I know that money is not free and property value is meaningless.

There are a lot of arguments I failed to address...........................all of them in fact as I am only stating an opinion, of course its not the only one.

[Morat]

Fair enough then

Sorry.. I think I need to stay away from Fred the Shred's house for a while

[djk]

There are various sensitivities, valid ones, that are pricked by a story such as that in the original post. What I find so irritating is the dishonesty and sheer arrogance of governments dressing up rather crude fiscal initiatives in greenspeak - not that it surprises me in the least.

Whatever your political leanings and the health (or not) of your cynicism, it must be clear to many that our contribution to, and exposure to, the present financial crisis has come about through the fundamental dishonesty of those in public life. The present Government, and it could be viewed as simply political pragmatism, succeeded in making electoral capital through leaving unchecked a period of unsustainable growth that came about largely because of the increasingly short-sighted gambling of banks. No opposition tried to bring this to light, either because they themselves were frantically making hay while the sun shone, or simply because they did not credit the electorate with enough intelligence to understand the argument. Either way, all our elected representatives of whichever stripe failed to act in our best interests because of vanity and greed.

Imagine you bought your council house in the mid to late nineties. It shot up in value and credit was cheap, so you remortgaged for home improvements. The value continued to rise, such that it seemed those home comforts you added seemed almost to come for free, so when it came time for a new car, you borrowed against your house again. Maybe you moved to a private estate somewhere - if you had more of your 'wealth' invested, you thought, you only stood to gain more, and now the kids each have their own rooms with Sky TV. The fact that you'd never raised any tangible capital never entered your head. And now you are jobless and homeless - you'd be pissed off, thinking, 'boy, was I suckered!'. And you were. And unfortunately it doesn't make it any better for the more prudent among us to say we knew that this was what would happen. More galling I would think would be that the government who drew you into this mess still tries to claim credit for the 'unprecedented period of growth', a period during which every politician chose to look the other way and buy a holiday home.

[nickso]

Imagine you bought your council house in the mid to late nineties. It shot up in value and credit was cheap, so you remortgaged for home improvements. The value continued to rise, such that it seemed those home comforts you added seemed almost to come for free, so when it came time for a new car, you borrowed against your house again. Maybe you moved to a private estate somewhere - if you had more of your 'wealth' invested, you thought, you only stood to gain more, and now the kids each have their own rooms with Sky TV. The fact that you'd never raised any tangible capital never entered your head. And now you are jobless and homeless - you'd be pissed off, thinking, 'boy, was I suckered!'. And you were. And unfortunately it doesn't make it any better for the more prudent among us to say we knew that this was what would happen.

i know that the above are your thoughts on the matter and probably not your life story but i have little sympathy for anyone who actually managed to do that to themselves without even the slightest thought for the consequences if it all did go tits up. borrowing upon your borrowings with little or no income is only going to go one way eventually, no matter what the larger financial market is like.

More galling I would think would be that the government who drew you into this mess still tries to claim credit for the 'unprecedented period of growth', a period during which every politician chose to look the other way and buy a holiday home

i have even less sympathy, actually closer to disgust, for anyone who thinks the government "drew them into it".

the people who are now moaning about the government failing them financially were probably not singing their praises when they were flying high on the crest of the financial wave.

[djk]

Imagine you bought your council house in the mid to late nineties. It shot up in value and credit was cheap, so you remortgaged for home improvements. The value continued to rise, such that it seemed those home comforts you added seemed almost to come for free, so when it came time for a new car, you borrowed against your house again. Maybe you moved to a private estate somewhere - if you had more of your 'wealth' invested, you thought, you only stood to gain more, and now the kids each have their own rooms with Sky TV. The fact that you'd never raised any tangible capital never entered your head. And now you are jobless and homeless - you'd be pissed off, thinking, 'boy, was I suckered!'. And you were. And unfortunately it doesn't make it any better for the more prudent among us to say we knew that this was what would happen.

i know that the above are your thoughts on the matter and probably not your life story but i have little sympathy for anyone who actually managed to do that to themselves without even the slightest thought for the consequences if it all did go tits up. borrowing upon your borrowings with little or no income is only going to go one way eventually, no matter what the larger financial market is like.

More galling I would think would be that the government who drew you into this mess still tries to claim credit for the 'unprecedented period of growth', a period during which every politician chose to look the other way and buy a holiday home

i have even less sympathy, actually closer to disgust, for anyone who thinks the government "drew them into it".

the people who are now moaning about the government failing them financially were probably not singing their praises when they were flying high on the crest of the financial wave.

I'm just making the point that people clearly were stupid enough to get themselves into this sort of mess and it has adversely affected us all - it doesn't make my life any easier to think that some stupid buggers have had a big comeuppance for their misunderstanding, but they should be warned against doing so rather than profiteered against by those who have the wherewithal to do a runner when things look dodgy.

On your second point, I think it likely that these are exactly the people who kept the present government in power in 2001 and 2005, superficially thinking that their own sudden improvement in living standards was both a good thing and brought about by those altruists in Westminster and Whitehall. Now they are finding out the hard way that it was all a charade and we will have another painful lurch in the politics of our country; neatly, for the politicians, avoiding the pressing need to halt the decline in the administraton of services, which, after all, is what we pay them to do.

Politicians lie - it antagonises those of us who recognise it and cheats those who are taken in by it - our present predicament as a nation is made all the worse because of the bare faced cheek of our elected representatives in ignoring their responsibilities. Whatever your political sympathies, you are disenfranchised by it.

[SUMPCRACKER]

Well said, its nice to see so many seeing the light.
But I wouldnt be suprised if they get in again!

[Morat]

Only one politician appears to have spoken out against the bank's suicidal tendencies and that was Vince Cable. Incidentally, he's from the same party that spoke out against the second gulf war.

Sadly that party was busy advocating a 1% tax rise at the time so it didn't stand a chance. If only people would actually vote with their heads instead of just falling back on class stereotypes we might have a decent government. Ultimately, you get what you vote for - and if you don't vote you may as well count yourself as having voted for whoever won.

[djk]

Only one politician appears to have spoken out against the bank's suicidal tendencies and that was Vince Cable. Incidentally, he's from the same party that spoke out against the second gulf war.

Sadly that party was busy advocating a 1% tax rise at the time so it didn't stand a chance. If only people would actually vote with their heads instead of just falling back on class stereotypes we might have a decent government. Ultimately, you get what you vote for - and if you don't vote you may as well count yourself as having voted for whoever won.

Cable does strike me as a politician with at least some conscience and integrity - a rare thing. In the main, they are all trying to tear party-political strips off each other rather than actually trying to make an impact on the things that really matter. I suppose it is an inherent flaw of democracy though, electioneering and populism are part of the game. To be frank, I favour smaller government - lower taxes, fewer services, fewer laws - but I think our politics has ignored this sort of argument for some time. What I really want, whether I agree with policies or not, is for those policies to be implemented with the minimum of bureaucracy and spin. That would at least be a start. Some hope.

[casper8r]

And here I was, mourning that the Zone is degenerating into a miss-spelling text-speaking conspiracy-theory-wielding misquoting pool of misinformation

Long live quality discussion, steady on, gents!

[nickso]

Imagine you bought your council house in the mid to late nineties. It shot up in value and credit was cheap, so you remortgaged for home improvements. The value continued to rise, such that it seemed those home comforts you added seemed almost to come for free, so when it came time for a new car, you borrowed against your house again. Maybe you moved to a private estate somewhere - if you had more of your 'wealth' invested, you thought, you only stood to gain more, and now the kids each have their own rooms with Sky TV. The fact that you'd never raised any tangible capital never entered your head. And now you are jobless and homeless - you'd be pissed off, thinking, 'boy, was I suckered!'. And you were. And unfortunately it doesn't make it any better for the more prudent among us to say we knew that this was what would happen.

i know that the above are your thoughts on the matter and probably not your life story but i have little sympathy for anyone who actually managed to do that to themselves without even the slightest thought for the consequences if it all did go tits up. borrowing upon your borrowings with little or no income is only going to go one way eventually, no matter what the larger financial market is like.

More galling I would think would be that the government who drew you into this mess still tries to claim credit for the 'unprecedented period of growth', a period during which every politician chose to look the other way and buy a holiday home

i have even less sympathy, actually closer to disgust, for anyone who thinks the government "drew them into it".

the people who are now moaning about the government failing them financially were probably not singing their praises when they were flying high on the crest of the financial wave.

I'm just making the point that people clearly were stupid enough to get themselves into this sort of mess and it has adversely affected us all - it doesn't make my life any easier to think that some stupid buggers have had a big comeuppance for their misunderstanding, but they should be warned against doing so rather than profiteered against by those who have the wherewithal to do a runner when things look dodgy.

On your second point, I think it likely that these are exactly the people who kept the present government in power in 2001 and 2005, superficially thinking that their own sudden improvement in living standards was both a good thing and brought about by those altruists in Westminster and Whitehall. Now they are finding out the hard way that it was all a charade and we will have another painful lurch in the politics of our country; neatly, for the politicians, avoiding the pressing need to halt the decline in the administraton of services, which, after all, is what we pay them to do.

Politicians lie - it antagonises those of us who recognise it and cheats those who are taken in by it - our present predicament as a nation is made all the worse because of the bare faced cheek of our elected representatives in ignoring their responsibilities. Whatever your political sympathies, you are disenfranchised by it.

cant agree more.

my point was, no matter how the politician lied or the goverment failed, the ultimate responsibility for your own finances lies with yourself. if people are now facing a distinctly smelly fan as a result of their overspending then i have no sympathy for them at all.

i also have no political sympathies. ive never found anyone worth voting for at either national or local level.

[djk]

Yeah, I suppose we're broadly in agreement. It's about individuals, be they politicians or the public at large, taking responsibility for things.

Good chatter anyway!

[fuzzy]

you dont have to have been stupid to be drawn into anything. how many people have the cash to buy a home outright? not many. so a morgage is the only answer. how many are now losing their jobs with no prospect of new work due to several factors and now face losing their homes ? is that their own fault?
were reaping whats been sown over the last few years as greed has spiraled out of control with modest profits not being enough, companies have been squeazing as much as they can screw out of everyone forcing prices up and up and beyond the reach of joe public, the bubble had to burst sometime..

[djk]

you dont have to have been stupid to be drawn into anything. how many people have the cash to buy a home outright? not many. so a morgage is the only answer. how many are now losing their jobs with no prospect of new work due to several factors and now face losing their homes ? is that their own fault?

I'm not saying that - as far as being 'drawn in' goes, the people you are talking about, rather than being drawn in, took a calculated risk and have been unfortunate to lose out. I'm merely making the point that the reason they have lost out is that other people were so brazenly pushing the limits of what was feasible - either by ignoring the consequences or being too foolish to recognise them. It's not a nice situation at the moment for anybody, barring the bastards who were robbing us all blind from day one. My point is that one expects the legislature to be proactive in minimising the likely damage from an economic downturn such as we have had - I simply do not except that those in charge of Britain's economy didn't see the catastrophe coming. They chose to ignore it and made hay while the sun shone, and now we're all paying for it, and will continue to do so for generations.

I've tried as far as possible to avoid explicitly presenting my political allegiances in this discussion, but I'm afraid I can't resist pointing out that every Labour government we have ever had has eventually near-bankrupted the country - you would have thought we'd have learnt by now.

[fuzzy]

the difference between the 2 main partys is whilst labour will underhandedly rob every last penny they can from behind your back whilst pretending theyre your friend conservatives will rob every last pound from your pocket to your face with no pretence.
i prefer the second option, at least you know your getting shafted.

[djk]

the difference between the 2 main partys is whilst labour will underhandedly rob every last penny they can from behind your back whilst pretending theyre your friend conservatives will rob every last pound from your pocket to your face with no pretence.
i prefer the second option, at least you know your getting shafted.

Lol, yeah, gotta agree with you there!