Car dealers looking to boost their profits as much as possible should go out of their way to give motorists the biggest incentives to buy a new car.
New research has indicated that a shift has taken place in the reasons why motorists feel the urge to buy a new vehicle.
In the past, at times when the cost of fuel was at its highest, motorists were on the lookout for the most fuel-efficient vehicles to reduce their general everyday running costs.
However, the recession has now caused a number of motorists to only seek a new car when their current model is incapable of running any more.
Six months ago, some 45 per cent of motorists cited saving money on running costs as their chief reason for buying a new vehicle.
Yet, the latest AA Personal Loans Car Purchase Index has revealed that this figure has now fallen to 29 per cent, with 44 per cent of motorists looking for a new car only to replace a current old or damaged model.
Thus, the government’s decision to introduce the scrappage scheme on older cars could be just the tonic that a dealer needs to boost sales, as it is an ideal encouragement for motorists to trade in their old car for a discount on a new model.
Mark Huggins from AA Personal Loans is optimistic that the scheme could introduce certain motorists into the new car market for the first time.
He said: "At a time when families are perhaps keeping cars longer, the new government scrappage scheme could be crucial to kick-start the industry and get people buying again.
"Despite the downturn, the average personal loan for a car has stayed at around £8,000 which means that the scrappage scheme will enable some families to buy a new car for the first time."
And manufacturer Nissan is extending its options further by allowing motorists with vehicles that are eight-years-old to benefit from the service.
The only catch is that they have to buy a British vehicle from the range.