UK adopts vehicle scrappage incentive, U.S. still debating

Britain is the latest European country to adopt a new incentive to entice consumers to scarp older vehicles in an effort to boost new vehicle sales. Meanwhile, on the stateside, the incentive is being stalled in Congress.

Chancellor Alistair Darling announced that when a vehicle more than 10 years old is scrapped, the government will offer a £2000 ($2,898 USD) discount on a new car. The new incentive will run from mid-May until March 2010.

There will be £300 million ($435 million USD) funding for the program; however, the incentive will be split between automakers and the UK government. The government will provide £1000 while the automaker will pay the other £1000.

Manufacturers must sign-up to be a part of the incentive. So far, Citroen and Hyundai have both committed to signing up. Ford, Volvo and Toyota have also shown their interest in joining.

– By: Kap Shah

Source: AutoCar