It resulted in a 40% rise in German car sales last month, in sharp contrast to the UK where sales slumped more than 30% compared with a year earlier.
Carmakers and dealers hope the UK experience will echo the German one.
"The government has taken the opportunity to boost the new car market, while simultaneously helping consumers buy a new car," said Paul Williams, chairman of the Retail Motor Industry Federation.
RAC Foundation director Professor Stephen Glaister said: "If the scheme leads to a reduction in the average age of the national car fleet then this has to be good for road safety as more modern cars will have a wider range of safety features built in."
The Society of Motor Manufacturers and Traders (SMMT) has said the scheme would also help replace heavily polluting cars with more efficient and less polluting new ones, though the scheme is open for buyers of any new car, not merely small, efficient ones.
The view from the UK's largest scrapyard in Newport, Gwent
But the car rental and leasing body, BVRLA, whose members supply 2.5 million company vehicles each year, said it was concerned about the impact on the second-hand market.
"Unfortunately, our ministers have chosen to follow the German model, which has been widely criticised for decimating the country's used car industry," said BVRLA chief executive John Lewis, who predicted that companies would hold on to their cars longer rather than selling them cheap.
The BVRLA is concerned this could result in a fall in demand for new cars from companies that would cancel out the rise in demand from consumers.
Mr Lewis was also concerned that the initiative would do little to safeguard jobs in the UK motor manufacturing industry since most cars bought here are made abroad.
Spare parts suppliers and garages could also suffer from a fall in demand resulting from the mass-removal of old cars from the market.
"Currently the vast majority of cars are still on the road at 10 years old. Indeed at 14 years old, half are still on the road," said Professor Glaister of the RAC Foundation.
"The scrappage scheme announced today risks consigning a lot of perfectly good, and relatively clean, vehicles to the dustbin."
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