France has successfully (for a while) used such a program in the past and Germany is now offering one. Now it's the UK who will offer substantial money to trade in an old car in order to spur growth with new car sales. Used car sales have been much more active than new car sales with many people buying something they can afford. Car dealers can make a better profit from the used cars as well so the trends for new car sales are not going in the right direction.
In France the plan to promote new cars worked for a period of time and as soon as the money stopped, so did sales. Assuming the economy bounces back, dealing with a weakened car industry for some time is not catastrophic, but the question is whether the UK (or US or EU) will bounce back quickly. There's very little to suggest the recovery will be fast or substantial and much more realistic to assume the recovery will be slow and small. But that's another discussion for another day in this recession. Today it's all about selling the new.
The motor industry and lobby groups are hoping this month's budget will include a scrappage scheme, under which car owners are given a financial incentive of about £2,000 to swap their old vehicle for a new greener model.
Treasury officials have told the industry they are seriously considering including such a stimulus in the budget a fortnight tomorrow although ministers publicly insist that no decision has been taken.
A scrappage scheme in Germany - which offers car owners €2,500 (£2,263) for getting rid of any vehicle over nine years old - has attracted more than half a million buyers, with sales soaring 40% there in March.
