THE government are set to introduce a motor scrappage scheme by the end of this month to halt the growing crisis in the Irish motor trade.

The Sunday Tribune can exclusively reveal that plans are afoot to give motorists €2,000 off the price of a new car if they trade in their old one if it is registered in 1999 or older. News of the one-year long scheme comes after representatives from the motor industry lobbied the government last month to introduce urgent measures to avert a major crisis in the trade.

The scheme will apply to cars registered in 1999 or before that fall into the A, B and C category for carbon dioxide (CO2) emissions. Cars are categorised by reference to CO2 emissions with category A vehicles emitting 0-120g/km and category B and C emitting 121-15g/km. It is understood that all cars registered 1999 or older will be eligible for the scheme as long as they have been successfully NCT tested and insured in the last two years. This proviso will be applied to deter people from attempting to trade in cars that have not been road-worthy for some time in exchange for a €2,000 discount on a new car.

According to the CSO, 10,997 new cars were registered in January, down from 32,961 in 2008, a decrease of 66.6%. The finance minister told the Dáil in early February that he had no plans to introduce a new scrappage scheme however the Sunday Tribune now understands that the government will introduce the new scheme at the end of March.

The Society of Irish Motor Industry (SIMI) claims that there are 312,000 cars that are over 10 years old on Irish roads, almost 100,000 more than there was when a similar scheme was last introduced between 1995 and 1997.

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