Germany's Bailout Plan Includes $3,200 To Buy A New Car

Trust the Germans to do something right. When the German government recently passed its own economic bailout plan, they created a way to boost the German car market through an incentive that is genuinely enticing.

Rather than offer small tax cuts or mild incentives, the German government is guaranteeing 2,500 Euros (roughly $3,200) towards anyone who wants to purchase a new car. Well, not quite anyone.

The rules strictly stipulate that anyone who scraps their 9-year-old or older vehicle will receive $3,200 towards a new (or one year old) vehicle. (The 9-year-old vehicle also has to have been registered in Germany for one year or more).

The plan is also an environmentally conscious one as getting old vehicles of the road and replacing them with newer more fuel-efficient and less polluting vehicles helps reduce greenhouse gasses.

One of the most surprising things about the new offer is that it applies to all cars, not just German made ones.

On top of other incentives offered by German manufacturers this can mean a savings by as much as a fifth of the price of the vehicle.

According to a report by the CBC, the plan seems to be working. While the German government isn’t willing to reveal any numbers as of yet the scrapyard business is booming, with some scrapyards reporting an increase in business of 200 to 300 percent.

The German government also seems to have high hopes as almost $2 billion has been earmarked for the scrap car plan.

[Source: CBC]

The almost three-week-old program has $2.4 billion worth of bonuses earmarked, but a spokeswoman at the Ministry of the Economy could not say how many applications had been received.