Cars are like people, in many ways. They need to have the proper care taken of them and to be treated in a certain way if they are to keep running smoothly. The longer they are in service, the more likely they will be to develop faults. Eventually, they need to be retired before they do some harm to themselves or others.
Numerous governments are now creating schemes whereby an older car can be traded in for money against the purchase of a new one. The thinking behind this is that older cars are both less safe and worse for the environment than newer ones, and the government can save money on future environmental protection by spending a small amount of money up front to ensure cleaner air.
The benefit for the motorist who trades in their car is that they save money on a newer car which they might otherwise not have been able to afford. It is an incentive which works to reduce the amount of pollution in the air and make the roads safer. The cash paid for the older cars, too, can be recouped in scrap costs and recycling.
There is some amount of controversy over such programs, with people arguing that it is a waste of government money that could be better spent elsewhere or not spent at all. In the end, any such program is best judged by its success, and these programs have been judged successful on balance. How often they will be repeated in future will depend on the economic climate.