ACFO has thrown its weight behind calls for a scrappage scheme, but urged the Government to include incentives for people to buy older vehicles.

By applying a scheme to include vehicles up to four-years-old, powered by engines that meet Euro4 emission standards and have a CO2 figure of 165g/km or less, ACFO claims it will boost a much greater proportion of the UK market.

“Such a move will kick-start new and used vehicle demand and fleets will, in many cases, be persuaded to return to the new car market as a result,” explained ACFO chairman Julie Jenner.

“Our proposal has the benefit of stimulating vehicle demand across the entire vehicle-buying sector.”

ACFO believes that drivers of older cars are far more likely to be able to buy a four-year-old Ford Focus 1.4 Studio five-door with an April 2009 CAP ‘average’ price of £2,875 or a 2005 Vauxhall Vectra 1.9 CDTi LS 120 hatchback with a CAP ‘average’ price of £3,000, than a £7,000 new or nearly-new model as suggested under the motor industry’s scrappage plan.

“We suggest that a scrappage scheme should be in place for a minimum of 18 months,” added Jenner.

“We do not want a scheme launched that is limited by a cash amount or for a short period of time as that is likely to create an instant demand peak with no long-term benefits.”

In addition, it suggested that a Government-backed scrappage scheme could be launched linked to a sliding scale of incentive payments related to vehicle age, similar to the ‘trade-in incentive scheme’ launched by Citroen.

For example: £2,000 for a new vehicle; £1,500 on a 12-months-old model; £1,200 on a two-year-old model; £900 on a three-year-old model and £500 on a four-year-old vehicle.

“Our scrappage scheme proposals promote the replacement of older cars with cleaner, safer and better equipped newer ones, but will benefit a greater proportion of the UK car market - consumers, fleets, franchise dealers, used car dealers and motor manufacturers,” said Jenner.