US approves $2 billion for scrappage

America's own scrappage scheme has run out of money after its massive success resulted in the full $1 billion being used up in just a week. Moves are now being made to add a further $2 billion funding.

Tagged 'cash for clunkers' by the American media, the scheme differs from the UK's in that it encourages buyers to trade in older, less fuel efficient vehicles in return for cleaner, newer cars - with either a $3,500 or $4,500 discount from the dealer.

However, it is possible that the additional requested funding will only be approved if the terms of the arrangement are updated to encourage the purchase of even more fuel efficient cars.

The US House of Representatives has approved the bill to add $2 billion of extra cash, though the legislation must now be passed by the US Senate. If the Senate requests changes, they'll have to be reviewed by the House once more, which is in recess until September.

Obama's administration has committed to funding the program until the Senate votes.

Shane O' Donoghue