Scrapping Old for New Boosts German Auto Sales
New-car registration in Germany is up 21% from February of last year, and the country had its best February for car sales in 10 years thanks to a direct-to-buyer incentive. Germany is offering a 2,500 euro discount to consumers willing to trade in a car that’s at least nine years old — and send it straight to the scrap yard.
The bonus — worth about $3,134 at current exchange rates — is part of the German government’s 50 billion euro economic stimulus program. It’s also expected to boost tax revenue through increased economic activity and lower tailpipe emissions as older, less-efficient cars are replaced.
Could a similar program work in the U.S., which uses only tax credits to move vehicles? Expect a resurrected debate in the coming years as more fuel-efficient vehicles roll out — especially if Germany’s program continues to prove successful.