Budget 2009- Car scrappage set at £2,000

The car scrappage scheme has been announced in the 2009 Budget, with a £2,000 incentive offered to car owners who scrap their old cars for newer, more energy efficient models.

The scheme had been widely supported by the motor trade, despite the Association of British Drivers (ABD) saying earlier this week "the scrappage scheme may stimulate the sale of new cars, but how will that benefit the British economy if those cars are built in France or Malaysia?"

Mr Darling said he could announce the scrappage scheme would be launched for anyone with a car over ten years old. Some £2,000 would be given in a voucher to go towards the price of a new car.

"The introduction of a vehicle scrappage scheme as announced in the Budget will boost the new car market, encourage consumers to get back into car showrooms, and reduce the likelihood of employee downsizing in this sector," said Paul Williams, chairman of the Retail Motor Industry Federation (RMIF).

"By opting for a vehicle scrappage scheme in the Budget, the government has taken the opportunity to boost the new car market, while simultaneously helping consumers buy a new car.

"The nation's car dealer network, which will be in the front line for the duration of the scheme, has the expertise that will enable the scheme to be a success, and will assist government in the implementation of the scheme," he added.