Depreciating values make car scrappage scheme redundant, says uSwitch.com

Mon, 18 May 2009

Those looking to upgrade their vehicle thanks to the government's recently introduced scrappage scheme may need to check the depreciation value of their new model and the price of car insurance for it.

uSwitch.com surveyed the top ten most popular cars on the market and found that their level of value depreciation makes the scheme, where those who scrap their old vehicles get £2,000 towards a new model, redundant.

According to the report, the average vehicle depreciates in value by £8,321 in the first year, more than four times the amount offered by the government for scrapping an old car .

Mark Monteiro, insurance expert at uSwitch.com, added: "Any motorists tempted to take advantage of the car scrappage scheme should research the cost of insuring their desired new vehicle as a matter of priority, as the cost could be significantly higher."

Recent research by esure showed that 24 per cent of those looking to scrap their current vehicle will not check to see if their car insurance premiums will change to cover a newer model.
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