Page last updated at 15:29 GMT, Friday, 24 July 2009 16:29 UK

US car scrappage scheme unveiled

Car being scrapped
Car scrappage schemes are already operating in other countries

The US government has unveiled details of its car scrappage scheme, aimed at persuading owners of "gas-guzzling" cars to exchange them for greener ones.

The $1bn programme, which runs until 1 November, offers vouchers worth up to $4,500 for people scrapping vehicles that do fewer than 18 miles per gallon.

They must buy a new car with a rating of at least 22 mpg or a light truck that manages at least 18 mpg.

Similar schemes in Europe have helped ailing firms sell more cars.

The carmaking industry has suffered worldwide from the economic downturn, which has pushed two of the big three US auto firms into bankruptcy protection.

Approved dealers

In order to qualify for the vouchers, car owners must visit the official Car Allowance Rebate System website ( to find a list of approved dealers.

Vehicles to be traded in should be drivable, less than 25 years old and have been insured and registered to their owners for at least a year.

The replacement vehicle must be brand-new and should have a retail price of no more than $45,000.

Neither the old car nor the new one has to be US-made. The scheme covers domestic and foreign-made vehicles alike.

As the website makes clear, the stated purpose of the scheme is to promote fuel efficiency.

"Oil is a non-renewable resource and we cannot sustain our current rate of use indefinitely. Using it wisely now allows us time to find alternative technologies and fuels that will be more sustainable," it says.

However, similar schemes in other countries, notably the UK and Germany, have acted as a stimulus to the economy by boosting car sales and production.

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