It's Official: UK Gets "Cash for Clunkers" Program

There you have it! After considering it for quite some time, the United Kingdom has announced it's own version of the much vaunted (and debated...and reviled) "Cash for Clunkers" vehicle sales program.  

 The United Kingdom's plan is quite unlike it's forebears, there is some key differences in substance and implementation. First off, the amount of subsidy is much less then the other plans. £2,000 (around $2,900 USD) is the amount finance minister Alistair Darling has put forth in his budget. 

Here's where things interesting too; UK government is only putting up £1,000 of the money, the rest is coming from the automakers. Obviously the auto companies were hoping for a full government subsidy, but with the current state of the UK economy (and indeed all economies) and a large looming budget deficit, that wasn't happening.

Also a key difference is the lack of any efficiency or fuel type requirements, meaning any vehicle is eligible under the program. Who knows maybe that was put in there for British brands Jaguar and Land Rover, so they would be eligible.

There's some bad news for UK drivers in the announcements though. To pay for the program, there has been an increase in the fuel duty (tax) by 2 pence. That will raise real costs for families all across the country; not sure that will go over very well. I guess the money has got to come from somewhere though.

Unfortunately, I think the changes to the program will dilute it's effectiveness significantly. I wouldn't expect success of the program to match the larger ones ongoing in other European countries. Time will tell though, I'm sure the U.S will be watching the effectiveness of this smaller, milder version of the "Cash for Clunkers" program.