As car dealers return to business after a Christmas break, the new Irish scrappage scheme will come into force. The agreement could prompt a surge in new car enquiries, as many dealerships cling to life.

The state scrappage scheme is similar to that implemented in UK – regarded by many as the saviour of the car industry and the car finance industry. It is thought that thousands of jobs in the Irish car industry also rely on the scrappage scheme becoming a success.

The state scrappage scheme knocks 1,500 euros off the price of a new car, even after huge discounting at the end of last year. The combined effort has pushed car companies into a price war to keep market share.

Although enquiries are already up, there is no certainty that these will become purchases.