Scrappage scheme launched

May 19 2009

The UK's car scrappage scheme has been launched across the country this week, with many manufacturers taking part in the initiative.

Offering drivers of old vehicles the opportunity to receive up to £2,000 off a newer, more environmentally-friendly mode, it is hoped the programme will help boost the car sector as well as reduce the number of heavy-polluting vehicles on Britain's roads.

The initiative could cut the availability of used cars in the market, as people look to have their old vehicles scrapped and replace them with new models, which could result in prices of used cars increasing further in the months ahead.

However, car manufacturers FORD and HONDA have both delayed introducing the scheme at their forecourts, amid concerns over some of the issues relating to the scheme, such as the tax payable on the incentives.

Chancellor Alistair Darling announced the plans for the scrappage scheme in his Budget speech last month, after similar programmes in Germany and Italy had helped significantly boost demand for new cars in those countries.

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