Drivers to get £2,000 for trading in cars
14 April 2009
The Government is expected to introduce a scrappage scheme to encourage motorists to trade in old cars for new ones.
The scheme could involve handing out £2,000 vouchers towards replacing vehicles which are more than nine years old.
It hopes the scheme could stimulate the flagging new car market which has seen car production fall at its fastest rate since 1968.
Reports indicated Chancellor Alistair Darling was "well disposed" toward the idea, which will be included in the Budget on April 22.
It is based on a similar scheme in Germany that has been hailed as a success.
It has seen new car sales soar 40 per cent year-on-year in March.
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Manufacturers claim that in this country it could generate demand for up to 250,000 new cars.
So far this year UK new car sales are down by 44.9 per cent against the first three months of 2008.
Sources stressed that no final decision had been reached over whether the plan would feature in the Budget.
But Mr Darling is said to appreciate the "merit" in the proposal. The £160 million a year costs could be shared with the industry.
Some environmentalists have opposed a scrappage scheme, saying it is better to keep old cars running because building new ones uses more energy.
However, Friends of the Earth has supported the plan, insisting it would encourage drivers to switch from thirsty cars for more fuel-efficient models.
Auto Trader will report all the major Budget announcements that affect drivers when they are announced on Wednesday April 22.
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