Bangers for Cash Goes Into Effect in the U.K.

Bangers for Cash Goes Into Effect in the U.K.

LONDON -- As Cash for Clunkers legislation slowly works its way through the U.S. Congress, a similar scheme known as "Bangers for Cash" went into effect in the United Kingdom Monday, and already media reports indicate increased activity in dealer showrooms.

Intended to stimulate new car sales that are off 25 percent from last year, the British deal offers cash incentives to buyers of new cars who scrap their old model, known as bangers. The government and car manufacturers are sharing the cost of giving a discount of 2,000 pounds ($3,000) to qualified motorists.

London's Guardian reported Monday that elderly motorists, mostly retirees on fixed incomes, led the stampede to the scrappage program. However, another study by an industry trade group shows younger and lower-income motorists would most likely take advantage of the program. One estimate puts the incremental increase in sales at 250,000.

In any event, the U.K. hopes the program will be as successful as those in Germany, France and Italy. No doubt its success or lack of will be of interest to U.S. lawmakers.

To qualify for the U.K. program, the old car or van must be roadworthy, have been registered before August 21, 1999, and weigh less than 3.5 metric tons. The new car also must be less than 3.5 tons as part of achieving the plan's goal of reduced pollution and improved fuel-efficiency.

Bangers for Cash continues until February 28 next year, or until the 300 million pounds allocated by the government run out.

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.