Partner Article

Car scrappage scheme ?to be extended?

The government is set to announce the extension of the car scrappage scheme.

The scheme - which started in May - gives consumers £2,000 off a new car if they trade in a car that is at least ten years old. The money is equally provided by the government and the car manufacturer of the vehicle that is bought.

Business Secretary Lord Mandelson said:“The sector has been strongly affected by the recession, but the scrappage scheme has delivered a boost to manufacturers and the supply chain. We have listened to the concerns of manufacturers and are increasing the funding of the scheme to £400m.

“But we must make sure that the help we do offer is targeted, limited and proportionate. This is not a blank cheque to the auto manufacturers but recognition that there is still a short term challenge to boost demand and confidence in the sector.”

The initiative was originally scheduled to end by February or when the £300m the government have allocated the scheme runs out.

The scheme has been seen as a success and sales of new cars have risen since its introduction.

Carmakers and unions recently wrote to Chancellor Alistair Darling to extend the scheme to help save manufacturing jobs amid concerns that car sales would fall sharply without continued incentives to boost demand.

This was posted in Bdaily's Members' News section by Ruth Mitchell .