Scrappage system 'gets green light'

As expected, the Governement announced a UK scrappage scheme in today's budget.

Chancellor Alistair Darling confirmed that owners of cars over 10 years-old will be offered a 1000 scrappage allowance from the Government, on the understanding that it is matched by the car makers when buying a new car.

Full details have yet to be revealed, but our sources suggest that 300million pounds will be made available on a first-come, first-served basis.

Early word from car makers is that some may not be able to match the Government incentive, especially on the cheaper cars that were expected to benefit from the scheme. Cheaper cars tend to be sold on tighter margins than more expensive models.

With manufacturers having to contribute, it's also unsure how this scrappage scheme may effect existing scrappage incentives available from the likes of Citroen and Vauxhall, and other discounts or incentives currently available.

Xavier Duchemin, managing director of Citron UK told What Car?: 'It's good news for the industry and the car buyer and well support it.

'Finding 1000 on a car like a C1 will be difficult, but well find a way.

'We need to think about the impact on our existing scrappage deals. It's a complicated way of introducing a scrappage scheme and why it's not the same as in Germany, France and the rest of Europe I dont know...

'Our existing scrappage deals have been hugely successful so far in April we are 10% up on last year in a market that's still 30% down.'