Government plans to spend old cars off the road

A scheme that could see car buyers handed up to £2000 is under consideration by the government in a bid to get new car sales moving.

Under the plans owners of older cars - typically those more than 10 years old - would be handed discounts on new models. Their cars would then be scrapped. German car buyers already enjoy a £2100 contribution when they trade-in an older car, while Spanish buyers are entitled to a £10,000 interest-free loan. The German dealers' organisation, ZdK, claims that this helps 200,000 more people into new cars.

The French Government began a similar system in December last year. They are offering a bonus of €1000 for people scrapping cars at least 10 years old and replacing it with a new car with carbon dioxide emissions less than 160g/km.

Society of Motor Manufacturers and Traders spokesman, John Procter said: "This is something that we are currently looking at and we have been looking at similar schemes across Europe to decide which would be best for the UK. If we were able to come up with a suitable scheme then it could be a double whammy for the Government in terms of car emission targets.

"The main thing for us to look at is that it would have to be sustainable and not create a spike in demand to then go down again. Our primary concern is to get new car sales up and get consumer confidence up again."

Simiar incentves are also being used in Austria, Greece, Italy, Portugal and Romania.

The proposed Scheme has also been backed by the Retail Motor Industry Federation, RMIF, and the British Vehicle Rental and Leasing Association, BVRLA.

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Car scrapping schemes in Europe