The government is making loud noises about its achievements with the first-time car buyer scheme. But there are implications from this ill-conceived populist project.
After distorting the car market for a year or so, what will happen to car sales from next year onwards?
Many buyers taking advantage of the tax reduction really don't need a car and are just enticed by the discount they're getting. Did they know that they must keep the car for at least five years, meaning costs mount with insurance, fuel, maintenance and instalment payments? Bad loans and repossessed cars are likely to follow.
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