In 2009 the Ministry of Transport, NZTA and Environment Canterbury ran a vehicle scrappage trial in Wellington and Christchurch for three and a half weeks. The trial cost $150,361 and 349 vehicles were scrapped. In this blog post we list some important lessons learnt from the trial and comment on the future viability of similar trials. Data Source
The trial cost about $430 per vehicle, but scrap vehicle owners were only offered $250 per eligible vehicle with a large chunk of the cost spent on advertising the trial itself.
Vehicle scrappage trial
For a vehicle to be included in the trial it had to be operable and held a warrant of fitness. The trial did not accept wrecked and accident damaged vehicles. The purpose of the trial was to remove older vehicles, which tend to produce higher emissions and are less safe, from the vehicle fleet. The trial offered $250 worth of vouchers in public transport and a chance to win a newer Toyota Corolla in exchange for the scrapped vehicle.
Lessons from the vehicle scrappage trial
- A majority of people who took part in the trial believed that their vehicle was worth more than that offered under the trail. At DEOL car solutions we do get calls from people who demand much more than the market value of a scrap car. We have found that answering questions related to vehicle scrapping and recycling helps customers understand the cash value of their car better. Scrap car prices can differ for different make and model cars because of vehicle weight and size and components.
- A quarter of the trial participants incorrectly thought that disposing of their vehicle would cost them money. A reminder that DEOL car solutions pays cash for scrap cars and offers a free tow-away. Unlike the trial, we also buy accident damaged vehicles and vehicles in any condition in general.
- The most common reason for vehicle scrappage were: (1) Mechanical unreliability and prohibitive cost of repairs. (2) Structural problems such as those arising from rust. (3) Vehicle exhaust problems that included smoke, holes and noise. (4) Cost of maintaining the vehicle.
- About half of the participants intended to sell their vehicle to a wrecker had they not taken part in the trial. Cash For Cars business such as ours help provide an important service by buying old and unsafe vehicles and removing them from our roads. We encourage our customers to ask questions when they sell their wrecked vehicles. Customers should demand more money if a vehicle is dismantled for parts, but should be prepared to accept a lower price if a car is scrapped with the intention of being removed from the NZ vehicle fleet for environmental reasons.
We believe that a similar trial in the future should offer higher cash value for scrap cars and should also consider incentives in the form of tax refunds. Rebates for scrapping older high emission vehicles could encourage more people to scrap their unwanted vehicles. Any future trial should also include wreckers and cash for cars providers and scrap car removal providers to help push the price of scrap cars higher with conditions on what happens to the scrapped vehicle. To meet its climate change objectives New Zealand in addition to incentivising uptake of electric vehicles also needs to incentivise removal of old polluting vehicles and a scrap vehicle rebate maybe just the answer.
