Upgrade your old car with £2,000 of government money

A new £300m government scheme means you can exchange your old car and get a £2,000 discount on a new one, but how does the scheme work, and what does it mean for you?

Fancy £2,000 and a brand new car? Well you're living in the right economic downturn. From today, drivers will be able to scrap their 10-year-old motors in exchange for two grand off a brand new vehicle. But how does the new government scheme work, and what does it mean for you?

It's all quite simple (ish), really. The scheme applies to any passenger car or small van up to 3.5 tonnes in weight. Cars must have been registered in the UK on or before 31 July 1999, have a current MOT test certificate, and have been in the possession of the person making the application for 12 months prior to ordering the new vehicle.

The vehicle you're planning to buy must be a passenger car or small van up to 3.5 tonnes, first registered in the UK on or after the scrappage scheme was launched on April 23rd, and declared new in the UK with no former keepers. It must also be registered to the same registered keeper of the vehicle to be scrapped. Got that?

The £2,000 is made up of £1,000 from the government and £1,000 from manufacturers participating in the scheme. The idea is that you drive onto a forecourt with your 10-year-old banger, agree a price on a brand new car (including the £2,000 discount), hand the money over, and drive away happy. The dealer will then arrange for your old car to be crushed, and will claim their £1,000 from the government. The scheme will continue until the government's £300m pot is exhausted, which means roughly 300,000 old cars will be taken off the road.

So what kind of car should you buy? Well, the world's your oyster, really, but you'll see the most benefit by opting for a cheap, eco-friendly motor. Cars like the Volkswagen Polo BlueMotion, which emits less than 100g/km of CO2, are exempt from road tax and returns as much as 74.3mpg.

Alternatively, you can splash a bit more cash to get something that's a little gadget-packed. In case you hadn't noticed, manufacturers have actually started putting some decent tech in cars now, and we're not just talking about CD players or digital clocks. Whet your appetite for by checking out our list of the twelve car gadgets nobody should live without, read the stories on our Car Tech channel in Crave, have a look at some of our Car Tech videos, then head down to your local dealership.