A NEW bid to revitalise Britain’s ailing car market is expected shortly.

The government is said to be considering the introduction of an incentive scheme for car owners to scrap old vehicles in exchange for new ones.

The move would probably involve a payment of £2,000 to trade in cars that are a certain number of years old.

The controversial plans are designed to boost demand for new cars and help struggling car makers, who are suffering during the recession.

A similar scheme in Germany has seen demand for new cars rise dramatically.

France and Italy have also introduced so-called car scrappage schemes to boost their beleaguered car industries.

Details of the UK scheme are likely to be announced in the Chancellor’s Budget on April 22.

Paul Everitt, of the Society of Motor Manufacturers and Traders (SMMT), said: “A scrappage scheme will provide the incentive needed and the evidence is clear that schemes already implemented across Europe do work to increase demand.”

Car sales fell by almost a third in March this year compared with last year and production has been affected even more dramatically.