Average car prices have rocketed. Gas guzzlers, such as 4x4s, have led the charge. Dealers are desperate to get their hands on cars, now Christmas is out of the way, customers still have a job and still need wheels. Sound unfamiliar? Welcome to Britain’s used car market, which has been on something of a tear, admittedly after a shocker last year when prices tumbled. This may be marginally useful for the new car market, since it helps residual values. But the overall impression is that consumers have to be convinced they are buying at the very bottom before they will take the plunge on the second biggest purchase they are likely to make in their lives.

If this impression is right, it will take more than a scrappage scheme to drag carmakers and affiliated industries out of their funk. Incentives, whether public or private, are problematic, especially when they don’t tackle structural problems like overcapacity. Detroit has learned this the hard way. One problem is addiction: how do you wean an industry off incentives, when it is terrified of the likely drop in demand? The scrappage scheme under consideration mitigates this somewhat by targeting owners of old bangers, who would not normally splash out on a new vehicle.