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UK Car Trade-in Scheme Aims to Push up New Car Sales
May 22, 2009

Car trade-in initiatives announced by the British government are expected to boost the car sales in the country, thereby producing more jobs.

According to the new budget presented by the British government, automobile owners in the country are going to receive £2000 ($2,921.39) on purchase of a new car, under a trade-in offer called “cash for bangers”, as reported by Daily Record. 

The government will give a total amount of £1,000 ($1,460.46) while the remaining share of £1,000 will be provided by car companies. This scheme is introduced to lift up the country’s car industry that has been witnessing major decline in sales. This plan will also help in removing the older cars from the roads and replacing them with the safer ones. This will help in bringing down the level of carbon dioxide emissions, as older vehicles produce more emission.

The British government has already set aside £300 Million ($483.31 Million) in order to fund this scheme. The trade-in scheme will be effective from mid-May this year and will be in existence till the fund gets finished. In the meantime, nearly 300,000 motorists are going to be benefited from the scheme.

As per the scheme (which is expected to run till March 2010), small vans and cars that are 10 or more years older will be eligible to take benefit of it. Any car owner having his vehicle registered before July 31, 1999 will receive incentive on trading in an old car for a new make. 

Countries such as Germany, Italy and France, which have already implemented the scheme, become successful in diminishing the impact of recession in their respective automobile industries. 

Apart from providing an impetus to car sales, the trade-in scheme will also increase the employment opportunities in the country. Earlier, the slump in car industry resulted in the shutdown of several factories due to which many people became unemployed. Over 800,000 jobs depend upon the UK automobile industry that is heading towards an emergency situation, as revealed by Society of Motor Manufacturers and Traders (SMMT). A survey commissioned by the SMMT found that 76% consumers favored the government’s new scheme.

According to a Research Analyst at RNCOS, “The British government’s incentive scheme will support the environment, economy and the employment. Some of the safer and more eco-friendly cars will replace the older cars, and this will serve as a booster for the sales of new cars.”

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