Government scheme to give cash if you trade in your old banger
The Government is planning to offer a cash incentive to motorists who trade in their old car for an environmentally-friendly car.
The “scrappage scheme”, which pays consumers to get rid of their old cars and replace it with a more environmentally friendly car, has proved successful in Germany, who recently reported a 40% increase in new car sales for March.
In the UK however, the figure is much different after the Society of Motor Manufacturers and Traders revealed a fall of 30.5% in March UK car sales, compared with the same month in 2008.
The UK Government has thought to have been opposed to the scheme declaring it was “unsure whether it would offer value for money”.
However, it seems the u-turn will see over 50,000 motorists benefit from the scheme, with the Government providing a pot of £250 million to be given out on a first-come, first-served basis.
The grants are set to be announced in next week’s budget.
The scheme is also part of the Prime Minister’s pledge to make the UK the ‘electric car capital of Europe’. Mr Brown also hopes the move will revive the struggling car industry and create hundreds of thousands of jobs.
Reports show that many consumers are willing to buy electric cars but cost prevents them doing so.
According to Geoff Hoon, Transport Secretary, less than 0.1% of the UK’s 26 million cars are electric.
A Department for Transport source said: “We want to be at the forefront of the low carbon economy, and motoring is part of that. This aims to make it more affordable for motorists to buy an electric car.
“These new cars will not be put-putting along at the speed of milk floats, they will be cars that are the equivalent of the ones we see on the roads today.”