Scrappage scheme boosts car sales

Friday, 29 May 2009 12:00 AM

By politics.co.uk staff

More than 35,000 new cars have been ordered since the launch of the car scrappage scheme last month.

Under the scheme, motorists can trade their vehicle older than ten years and receive a £2,000 discount when purchasing a new car.

Half of the money is provided by the government while the other half comes from the manufacturers' pockets.

Up to 300,000 new vehicles can benefit from the discount, partly funded by the £300 million set aside for the initiative by the government in their April's budget.

So far, orders have included all makes of cars and London taxis were also among the traded vehicles.

The scheme was "enticing car buyers back into the showrooms", said Paul Everitt, chief executive of the Society of Motor Manufacturers and Traders, last week.

A spokesman for the Department for Business, Enterprise and Regulatory Reform said: "We are really pleased that the scheme seems to be delivering a boost so early in the scheme."

It is thought that the scheme will boost the car industry which has greatly suffered from the recession. Car sales had declined for 11 successive months in the UK triggering job losses and production cutbacks.

Vehicles up for scrapping should have been registered before July 31st 1999. The programme is similar to schemes in other major European countries like Germany and France.

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