This follows announcements from other car manufacturers introducing similar schemes to encourage drivers to switch to low-emissions cars.
Cars that are eligible for this offer are any diesel vehicles made between 1992 and 2010 or Euro 1 to Euro 4.
BMW and VW both introduced schemes a few weeks ago very similar to the one announced by Mercedes.
Mercedes’ scrappage scheme will run until the 31st December 2017 and drivers must register their new car between August 2017 and March 2018.
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In addition to the introduction of diesel scrappage scheme, German car manufactures also announced free software upgrades to customers to improve the emissions they produce.