Clean Car Upgrade programme - new scrap-and-replace trial

Forums › Transport (cars, bikes and boats) › Clean Car Upgrade programme - new scrap-and-replace trial

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#2915586 18-May-2022 14:18

surfisup1000:

I think electric cars are the way of the future, but, introducing them before the technology is ready for mass rollout is foolhardy and irresponsible.

What aspect of EVs makes you think they are not ready for mass rollout? Keeping in mind that NZ is very much behind many European countries (eg, Norway, where monthly vehicles sales are 90% EVs these days)

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Scott3

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#2915596 18-May-2022 14:27

gzt: Brand new Toyota Yaris Hybrid could be the big winner in this. Very low maint and very low fuel consumption.

Yes.

Base trim Yaris hybrid is $30,990 Driveaway, Less clean car rebate of $4,294.66, and less $10,000 clean car upgrade money.

Works out to a $16,695.34 upgrade cost.

Pritty cheap for the most efficient non plug in car available (3.6L/100km 3P-WLTP conversion on 91RON), and with the new car perks like 5 years /100,000km warranty + CGA protection etc.

Assuming the car is big enough for one's needs it would be an attractive offering.

Just a though, retirees are going to do well out of this. Low income, but typically a bit of savings, and often, little need for a larger car.

Sadly, if the criteria is simply "hybrid", disappointing offering's like the swift mild hybrid will qualify also (4.7L 3P-WLTP conversion on 95RON).

wellygary

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#2915599 18-May-2022 14:44

Scott3:

Yes.

Base trim Yaris hybrid is $30,990 Driveaway, Less clean car rebate of $4,294.66, and less $10,000 clean car upgrade money.

Works out to a $16,695.34 upgrade cost.

Pritty cheap for the most efficient non plug in car available (3.6L/100km 3P-WLTP conversion on 91RON), and with the new car perks like 5 years /100,000km warranty + CGA protection etc.

Assuming the car is big enough for one's needs it would be an attractive offering.

Just a though, retirees are going to do well out of this. Low income, but typically a bit of savings, and often, little need for a larger car.

Sadly, if the criteria is simply "hybrid", disappointing offering's like the swift mild hybrid will qualify also (4.7L 3P-WLTP conversion on 95RON).

Just remember its only a 2500 car "trial" over the next two years... I suspect they are gonna discover a few bumps along the way....

I think they are going to have to find ways to prioritise those using them a "daily drivers" and doing high miles ... facilitating pensioners to buy a Yaris that only does minimal mileage would likely be seen as a policy failure...

( on thinking - they could pull that data from the WOF database)

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#2915601 18-May-2022 14:44

richms:

Is there anything in this to stop me from right now going out and buying a heavy fuel using cheap piece of crap that I dont care about and then cashing it in when this is up and running? Seems a great way to get a vehicle to use for a while and be paid for it too.

Nothing, except much of the criteria is not yet known.

We already know that your household income will need to be less than cira $75k,

But potentially other criteria could apply:

Cap on wealth (to keep wealthy retirees from availing the program)
Minimum length of ownership of the clunker - To stop people buying a car to scrap. Date could be set to say 1st may.
Max age of clunker (USA used 25 years).
Min fuel economy of clunker (USA used 13.1L/100km)
Road worthiness requirements OR the opposite. Either requiring the car to be road legal, or only accepting car's that fail WOF's (although the latter would be stupid as people could easly do things like cutting seatbelts to get a fail).

Also there is the potential, like with the first home buyer grants that dictate how you used the car. I.e. you have to give the money back if you sell the car in X years, or if you don't use it as your primary car (say by renting it out).

Note that also there is initally going to be a trial of 2500 vehicles, before the scheme goes live. Potentially this could take many months, and no way of knowing the criteria to get in the trail. Previously scrap page trails have been geographic (wellington & Christchurch)

But if you are willing to carry that risk, by all means, go buy the likes of the below $1400 gas guzzler, and scrap it when the scheme kicks off.

https://www.trademe.co.nz/a/motors/cars/mitsubishi/diamante/listing/3597579856

Given the way the car market is at the moment, desperation is minimal or negitive on such cheap cars.

gzt

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#2915739 18-May-2022 18:07

wellygary: I think they are going to have to find ways to prioritise those using them a "daily drivers" and doing high miles ...

That does make sense to some degree. The other factor is life of the vehicle. A vehicle provided to a single car family will probably get good use and almost certainly be passed on to the kids when electric becomes economic.

richms

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#2915748 18-May-2022 18:18

I'm was thinking if I can find a cheap au falcon that I can use as a parts car for my good one if it all falls thru. But they have gone up astronomical amounts since I last looked. Perhaps an estima or something I can rip seats out and use as a van.

Richard rich.ms

Scott3

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#2915796 18-May-2022 22:07

gzt:
wellygary: I think they are going to have to find ways to prioritise those using them a "daily drivers" and doing high miles ...

That does make sense to some degree. The other factor is life of the vehicle. A vehicle provided to a single car family will probably get good use and almost certainly be passed on to the kids when electric becomes economic.

It absolutely makes sense to target high mileage households for the scheme. (swapping out a 10L/100km car for a 5L/100km one in households where it is driven 40,000km a year, is worth eight times the emissions savings of doing it in one that drives 5,000km a year). However I don't see it happening.

Criteria are already about the maximum complexity for what is ultimately a project for political gain.

Tighten the eligibility Eritrea around, and one would need to loosen other eligibility critirea (i.e. level of emissions of vehicle scrapped, or household income cap) to get the same volume of cars scrapped.

Trying to double up a social & emissions reduction project already means the spend will be sub-optimal in each area's.

Also detailed targeting (such as high annual mileage), would necessitate a first home buyer grant like block on sales for a few years. Kinda destroys the targeting if the clean car is immediately flipped.

If the goal is to simple green the fleet on average, by removing some high emissions cars and replacing them with much lower emissions one's, it doesn't really matter if cars get sold quickly after the upgrade.

[edit] - should note that this scheme there is a risk this scheme is seen as rewarding those who cause excessive emmisions.

Two households, same income.

One pays more for housing so they live walking / biking distance from work. Might not own a car, or might own one efficient car...

Second pays less for housing in a location far from amenities, and owns multiple old 6+ cylinder cars, which they do a lot of km in.

First household's tax money will end up funding the second households car upgrades, desire the first household doing the right thing from an emissions perspective.

Attempting to target high mileage households will effectively reward higher emitting households. Which could be a bad look in the media.

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Scott3

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#2915805 18-May-2022 22:38

richms: I'm was thinking if I can find a cheap au falcon that I can use as a parts car for my good one if it all falls thru. But they have gone up astronomical amounts since I last looked. Perhaps an estima or something I can rip seats out and use as a van.

You raise a good point. Used car market is very tight at the moment. And this goes right down to very cheap cars. Pickings are very slim for WOFed and Regoed cars without major issue under $1500 or so.

Cheapest AU falcon on trademe that my search turned up (would have missed stuff without "AU" in the listing) was $2400 buy now.

Lowest Estima Buy Now is $4000 (lowest auto one is $5000) - both have had seats ripped out and camper-van conversions.

Reality is the used car market is likely to stay tight for some time. Especially when backpacker's turn back up again and start buying estima's.... Good chance you purchase could hold value regardless. Also the potential that even if you don't qualify for the uprade, that the reduction of old car's in the fleet further inflates vehicle values.

If you have space to park a car for a while, and are happy to tie a couple thousand up on a potential $8k gain, it could be a sensible financial play to hoard some old guzzler now. My household won't qualify under the income limit, so it is not something I can consider.

As with cash for clunkers in the USA, destroying a bunch of perfectly functioning car's is going to lead to even more tightness in the used car market.

Potentially could push up the value of a high school student crappy car by another thousand of so. (a 1996 pulsar seems to run at $2500 buy now at the moment..)

In terms of reducing our countries overall Vehicle km traveled by 20%, this could be good.

But for households in poverty who can't access this scheme (say due to not currently owning a running car, or current car being to efficient), it could move car ownership futher out of reach.

Also could spell the end of older cars with simple mechanical systems that could be realistically DIY repaired

gzt

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#2915809 18-May-2022 22:45

Annual mileage targeting would be ideal. I can't see much wrong with it from a CO2 pov. This would tend to put commerical and a few high km rural users on the radar.

Interesting question. Does the package provide for commerical users?

Minor issues. Milage does not account for fuel wasted in traffic. Add 5% for winter peak hour motorway commuting in Auckland maybe? Close to zero in a hybrid or electric.

gzt

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#2915812 18-May-2022 22:54

Scott3: . (a 1996 pulsar seems to run at $2500 buy now at the moment..)

Pulsar and Starlet type hatch have always been overpriced secondhand. That price is nothing surprising imo. People tend to recall them as reliable and cheap to run. Fuel economy is not impressive. They might have a point on reliability to some extent.

Scott3

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#2915813 18-May-2022 23:06

gzt: Annual mileage targeting would be ideal. I can't see much wrong with it from a CO2 pov. This would tend to put commerical and a few high km rural users on the radar.

Interesting question. Does the package provide for commerical users?

Minor issues. Milage does not account for fuel wasted in traffic. Add 5% for winter peak hour motorway commuting in Auckland maybe? Close to zero in a hybrid or electric.

Some of the stuff with high mileage users is already self enforcing. Pretty unlikely a low to medium household is doing massive mileage in a thirsty car. 30,000km a year in say a Mitsubishi Diamante at 11.8L/100km with $3/L fuel. That's $10,620 a year in fuel alone. Pretty hard to afford on $75,000 a year gross.

Given the maximum annual household income, it is a fair bet that the Clean car upgrade will not provide for commercial users (beyond people using their private car commercially).

You are absolutely correct that actual consumption can come in far in excess of rated consumption. In a petrol / diesel car, the kind of driving I do can easily result in using 50% more fuel than rated. If I recall correctly one tank I did in my corolla years ago was more than double the rated fuel consumption (extremely heavy traffic commute involving crossing the Auckland CBD.

Realistically this is unlikely to be considered in the scheme.

It seems probable that that the scheme will be about:

Improving fleet average economy (scrap thirsty cars and replace with efficient ones)
Getting cleaner cars into low to mid income households for social reasons

Latter point may be about softening the public up a little about future petrol tax hikes.

Wheelbarrow01

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#2915823 18-May-2022 23:35

My two cents would be that we know many low income families drive around in an old barely roadworthy gas guzzler because that is all they can afford. Something like a 6 cylinder Commodore or Falcon etc. They may have had the same car for 10 years or more.

They likely don't service it because it costs too much, or they do the bare minimum (maybe dad [or mom] does an oil change at home using generic oil & filters from the likes of Supercheap).

They run the tyres down to minimum tread, then buy budget second hand replacements.

They don't bother with insurance (or only have 3rd party at best) as their $1000-$2000 clunker is not worth insuring - or because they simply can't afford it. But parts are cheap so if they ding it, they can buy a second hand indicator cluster or a window for a few bucks usually. If it breaks down, they usually have a mate who can work on it (or they watch DIY vids on youTube) because old cars are way less complex and therefore relatively easy to work on.

Now throw that family into a brand new or near new $35,000 car (or even a $20k car). Yes it's cheaper to buy with this magical subsidy, but can they afford the repayments? Can they afford the warranty servicing? Can they afford the insurance? If they can't afford the insurance and the car is in a fender bender, can they afford a $500 headlight or a $1500 windscreen? If it's written off and they default on the government lease payments, who picks up the tab? The +$75k salary brigade?

What I am saying is that an old gas guzzler may look expensive to run on the surface, but scratch a little deeper and it's actually very cheap "cash up front" motoring. Some low income families could be suckered into this scheme only to realise too late that it's actually a financial millstone around their neck.

It would probably also pay to remember that for every low income family who can't afford an efficient $20k car, there's probably another family who can afford it, but actively chooses not to waste their income financing a depreciating asset - even if it seems like a good deal.

gzt

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#2915833 19-May-2022 06:17

A lease option if available addresses some of those concerns.

gzt

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#2915836 19-May-2022 06:55

Lease options in progress as pilots may get additional funding:

https://www.newsroom.co.nz/car-leasing-scheme-gets-20m-climate-response-funding

https://www.rnz.co.nz/national/programmes/checkpoint/audio/2018842319/akina-foundation-starts-hybrid-car-lease-scheme-for-low-income-families

wellygary

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#2915879 19-May-2022 09:42

Wheelbarrow01:

What I am saying is that an old gas guzzler may look expensive to run on the surface, but scratch a little deeper and it's actually very cheap "cash up front" motoring. Some low income families could be suckered into this scheme only to realise too late that it's actually a financial millstone around their neck.

It would probably also pay to remember that for every low income family who can't afford an efficient $20k car, there's probably another family who can afford it, but actively chooses not to waste their income financing a depreciating asset - even if it seems like a good deal.

And that is why they are running it as a small pilot, rather than a straight rollout like they did with the EV discount,

There are lots of unknowns about both how it will work on the Govt Side , but there will also be huge levels of unknowns on the consumer side.

The question is, can a scheme ultimately be structured so it can achieve the most emissions reduction for the least $$$ - because at the end of the day this is about emissions reductions, - the newer/safer car/e-bike/PT discount is just the facilitator

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