People buying new cars could get loans financed by the taxpayer.
Under a proposed scheme, lenders who provide finance for car purchases would get access to cash from the Bank of England's special liquidity scheme.
With finance accounting for 20 billion a year and funding around half of all new car purchases, the current recession has ensured this supply of cash has all but dried up.
Plummeting sales figures for new cars have prompted Gordon Brown and Business Secretary Lord Mandelson to urge the Bank of England to extend access of its special liquidity scheme to the car industry's finance arms.
News of the plan comes just a day after 450 job losses were announced at Jaguar Land Rover.