Troubled carmakers want UK drivers to be given a £2,000 bonus for scrapping their old cars.
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It is thought a ‘scrappage incentive scheme’, similar to those in place in other European countries, would help to increase demand for new cars during the financial downturn.
Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said urgent action is needed to get consumers back into the showrooms and boost demand in the market.
‘It is vital that car buyers are given the confidence to buy now and a scrappage incentive scheme is a clear signal which has already proved successful in other EU member states,’ he said.
The SMMT proposed its scrapping scheme to Lord Mandelson’s Department for Business, Enterprise and Regulatory Reform (BERR) earlier this month. Under the plans, cars and vans over nine years old could be scrapped in return for a £2,000 cash incentive towards a new or nearly new vehicle.
Recently introduced scrapping schemes in Germany and France are expected to generate demand for between 200,000 and 400,000 replacement vehicles. In the UK, the SMMT estimates that up to 250,000 cars could go through the system in just 18 months.
It is thought that by taking older, less efficient cars off the road, CO2 emissions would also be greatly reduced. As our guide to the new road tax rules shows, drivers of most-polluting cars are now hit by huge annual bills.
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