For dealers scrappage is being seen as a way to get more consumers to visit their local showrooms.

Mark Lavery, Cambria Automobiles' chief executive, told AM: “Any form of noise is welcome and I think the retailers will have a good time of it. I’m not so convinced about the manufacturer side. 

“Administration costs of implementing the scheme are a worry, but there’s no way around it. We have to accept that in order to gain the stimulation in demand the scheme will deliver.”

“You have to be concerned about speed of payment from the Government, but as always the devil will be in the detail.”

Marc Matthew, chairman of the Retail Automotive Alliance of 22 franchised dealer groups, said: “This isn’t just about green motoring or propping up a UK manufacturing base it’s simply about giving consumer confidence a boost, reassuring the customer who may have been putting off the purchase of a new car or van because of the economic climate.  

“It’s a real positive step and customers can be certain that we will adopt this scheme with open arms. 

"Customers will also benefit from reduced VAT costs until the end of this year. There simply has never been a better time to buy a new vehicle.”

Nigel Murkett, joint managing director of Murketts Vauxhall of Cambridge, said: “It will have a positive impact for the benefit of motor manufacturers, the economy generally and the environment. 

“Older cars generally pollute more than newer cars, so this measure should increase the interest in new cars, generally improve the emissions of cars and help to safeguard employment during a difficult time.”