When it was introduced, the public had mixed feelings about the government-sponsored scrappage scheme. Many believed that the car industry could survive without taxpayer money, while others thought the plan would fail. The scheme itself was a response to declining new car sales in the UK. Well, declining is a bit of an understatement. In fact, sales had fallen off the proverbial cliff. In the first quarter of 2008, new car sales were down by 38 percent from the previous year. In the end, the scrappage scheme was a success as it led to eight consecutive quarters of growth. At the same time, the used car market was plugging along without the need of government aid. Even in the midst of the recession, second hand car sales increased for two consecutive years. In 2009, the market reported a sales increase of 6 percent. Incredibly, used car dealers actually raised prices several times during the year and consumers continued to buy. They also continued to grow their inventories as desperate residents sold vehicles to dealerships in record numbers.
With ample inventories and rising sales, used car sellers have many reasons to smile these days. The end of the scrappage scheme and rising new car prices is also auspicious, since new cars are their only true competitor. Perhaps that is why most experts are predicting a stellar 2011 for the used car market.
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