So Alastair Darling has announced a new plan to offer a £2,000 discount if you trade in a ten year old car and buy a new one. Woohoo!

Now then, let’s have a little think about this. I drive a 1999 Ford Mondeo ST200 which would qualify in a few months’ time. I bought this second-hand at less than a year old and got a whopping discount off the new price. So woohoo! Let’s go and buy the new equivalent Mondeo.

Except there’s not really an equivalent, but there is a 2.5L 220PS version though not as nice looking.

In 2010, I will pay £205 to tax the ST200. On the basis of the Ford’s emissions figures, I would pay £245 a year on the new one but in the first year, I’d pay £550!

So let’s do the sums: the Government discount of £2,000 is probably £1,000 more than mine’s worth. So I’m up £1,000. Then I would pay £350 more for tax in the first year, so I’m only up £650 now. And that’s around a 2.3% discount in real terms. No doubt the dealers won’t want to add their own discounts on top of this if they can help it and of course buying new and turning the wheels would lead to a huge reduction in value that would dwarf that discount.

And of course every year I’d be worse off because the VED is higher on the new one than the old one.

If I go for more of a performance car then the numbers simply don’t stack up especially as the first year’s VED would go as high as £950!

No doubt the banks wouldn’t want to lend me the money anyway…