VideoDrivers with cars that are more than 10 years old can now scrap them in return for a £2,000 discount on a new model, as the car scrappage scheme begins.
Business Secretary Lord Mandelson said the £300m scheme would "provide a boost to the industry and kick-start sales".
But critics say it is not generous enough and does nothing to encourage the take-up of low emission cars.
New UK car sales were down 28.5% in the first four months of 2009 compared with the previous year.
In terms of shifting new cars it's not going to do as much as hoped
Kieran Puffett, editor of car price guide Parker's
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Earlier this month, research by car price guide Parker's found that of 600 people questioned, 81% said they would not be taking advantage of the scrappage deal.
Video"There are so many good deals out there on pre-registered nearly-new stock that actually it's easier to find a car with a bigger discount under these pre-registered deals than it is under the scrappage scheme," said Kieran Puffett, editor of Parker's.
"An awful lot of people were putting off their car-buying decision until they heard about the scheme and having heard it it's not actually enough for them to really think about buying a brand new car.
"They will be looking at other alternatives. So in terms of shifting new cars it's not going to do as much as hoped."
'Flood of enquiries'
Under the scheme, owners who scrap their old cars will receive a £1,000 subsidy from the government on a new one.
Manufacturers will provide at least a similar discount, and so far 38 have signed up.
In effect the £2,000 incentive can act as a deposit against loans for many less-well-off drivers
Edmund King, AA president
Such tactics have already been tried in other countries. In Germany, for example, a scrappage scheme helped boost new car sales by 40% in March.
Lord Mandelson said that since the announcement of the scheme in the Budget there had been "a flood of enquiries from customers".
Meanwhile, motoring organisation the AA said it could pump as much as £2bn into the UK's car sector.
And it said that even if only 1% of motorists took it up, it would be over-subscribed.
The AA also carried out a poll of 15,000 members which found that the offer was most popular with pensioners, drivers aged 18 to 24 and those in semi-skilled and unskilled professions.
President of the AA Edmund King said: "In effect the £2,000 incentive can act as a deposit against loans for many less-well-off drivers."
He also said the scheme would "transform the chances of survival in a crash for thousands of car owners" whose current old cars offer substantially less protection than newer models.
VideoBut Friends of the Earth executive director Andy Atkins said the scrappage scheme was "a lost opportunity".
"A well-designed scheme could have played a limited role in cutting emissions from our roads," he said. "But, unlike some other countries, the UK scheme doesn't prevent motorists part-exchanging an old, small model for a brand-new gas guzzler."
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