Motorists buying new cars will get a £2,000 discount if they trade in for scrappage cars that are 10 years or older, the chancellor has announced.
Alistair Darling unveiled the scheme – which will run until March 2010 – to help the struggling car industry.
He said he wanted to help the UK’s motor industry “which has been one of Britain’s success stories”.
But critics have said the scheme could hit second-hand car prices and will do little to safeguard UK jobs.
To benefit from the scheme, a buyer must have been the registered keeper of the car that is due to be scrapped for at least 12 months.
Half the scheme will be paid for by the government, with manufacturers contributing the rest.
The government has set aside £300m to pay for the scheme, which will benefit 300,000 customers.
Welcome boost
A similar scheme to the one announced by the chancellor was introduced in Germany earlier this year.
It resulted in a 40% rise in German car sales last month, in sharp contrast to the UK where sales slumped more than 30% compared with a year earlier.
Carmakers and dealers hope the UK experience will echo the German one.
