Car scheme stumbles at first hurdle

The car-scrappage scheme which was intended to pull the motor industry out of its current doldrums has started off slowly after big name manufacturers announced delays in taking part.

Firms such as Ford and Honda are not yet registering any new vehicles under the scheme due to a lack of clarity over VAT payments and the role of dealers in the initiative.

The `cash for bangers` scheme, under which owners of cars and small vans more than 10 years old will get £2,000 off the price of a brand-new vehicle when scrapping their old motor, was hailed by Prime Minister Gordon Brown and Business Secretary Lord Mandelson during their recent visit to a Nissan dealership in north London.

But glitches have occurred, with Ford saying `administrative issues` led to a delay in their involvement, while Honda said its dealers had been told not to register any cars until there was clarity on a number of outstanding issues.

The Society of Motor Manufacturers and Traders said: "We are extremely pleased with the progress made and confident that the final details will be resolved shortly."

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