£2,000 incentive to buy a new car

April 15th, 2009

The Telegraph is reporting that the Government is tipped to introduce a £2,000 incentive to encourage people to scrap their old cars and buy new ones.

The reasoning behind it is that old cars are less fuel-efficient and so more damaging to the environment. There are likely to be stipulations regarding the car being road-worthy, of a certain age, taxed and owned for a certain period of time to stop opportunists from just buying an old banger and immediately trading it in.

Apparently Britain and Poland are the only major European countries not to have a ’scrappage’ scheme. However, the Government appear to be concerned about the possible cost of such a scheme and are looking at different ways of financing this. For example, according to The Times Online, “The Treasury is understood to have suggested that the industry match a taxpayer bonus of £1,000″, or slant the scheme towards costlier models. The Society of Motor Manufacturers and Traders believe that diluting the scheme would set it up for failure.

Details of the scheme are expected to be announced on the 22nd April in the Chancellor’s budget but hopefully it will help boost the car market.

Entry Filed under: cars