minister for finance Brian Lenihan has given the strongest hint yet that he will introduce a motor scrappage scheme as part of the emergency budget on 7 April.

Replying to a parliamentary question from Wexford TD Seán Connick, Lenihan said the scheme "will be considered in the context of the supplementary budget".

Connick believes that Ireland should introduce such a scheme as Germany is reporting a 21% year-on-year increase in new car sales in February after they introduced a similar scheme.

His comments come just weeks after the Sunday
Tribune revealed details of a government plan to help the growing crisis in the Irish motor trade.

It is understood plans are afoot to allow motorists €2,000 off the price of a new car if they trade in a vehicle registered in 1999 or before. The one-year long scheme comes after motor industry representatives lobbied the government in February.

It is understood that all cars registered in or before 1999 will be eligible for the scheme as long as they have been successfully NCT-tested and insured in the past two years. This proviso will be applied to deter people from attempting to trade in cars that have not been roadworthy for some time in exchange for a €2,000 discount on a new car.

It is hoped the switch will have the effect of boosting government revenue, helping the ailing motor trade and also allowing motorists to make the switch to more environmentally friendly cars with lower VRT and road tax rates.