Pressure is building on the Government to introduce a scrappage scheme for older vehicles to reignite sales of new cars.

Ministers are believed to be considering a scheme whereby motorists are paid up to £2,000 to trade in their car for a new one.

The idea gained momentum following the Society of Motor Manufacturers and Traders announcment this week that new cars sales for January had dropped by 30.9% tp 112,087 units.

Commenting on the figure SMMT chief executive Paul Everitt said: "There is a clear need to stimulate demand for new vehicles in the UK market.

"A number of EU member states have launched scrappage incentive schemes, which have the benefit of boosting consumer confidence and delivering significant environmental improvements.” 

“The UK motor industry is urging UK government to introduce a similar scheme and help sustain jobs and businesses throughout the sector.”

French drivers with a vehicle over ten years old are offered between 1,000 and 2,000 Euros towards a new car which must emit less than 160g/km.

In Spain motorists with cars more than 10 years old or that have done more than 150,000 miles are offered a 10,000 Euro 0% loan to buy a new car or LCV.

The car must cost under €30,000 and emit less than 140 g/km.

The LCV must emit less than 160 g/km.