Industry News from Yes Insurance

People who have been looking for cheap car insurance quotes because they are planning to trade in their old banger under the scrappage scheme may want to think again.

The Association of British Drivers (ABD) has suggested motorists buying new vehicles as part of the initiative will not necessarily make the kind of savings they might have been hoping for.

It explained that a number of manufacturers have had to put their prices up to cope with the losses they expect to incur as a result of the programme.

This means participants in the scheme may not get their hands on the bargain they wanted.

However, ABD suggested one group will benefit from the initiative.

Spokesman Brian Gregory said: "The cars cost about £5,000 to £6,000, so it's the government who benefits from the VAT, car tax and all the rest of it."

Earlier this week, the organisation suggested people might be better running their old vehicles into the ground.

Comprehensive car insurance for these autos may be cheaper, as such models are generally less expensive to replace than newer motors.

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