As new car sales improve due to the government scrappage scheme it has now prompted call for the government to extend the scheme and follow suit as the US replenish their Cash for Clunkers similar scheme.
The Society of Motor Manufacturers and Traders (SMMT) said the sales of the smallest new cars have increased the most in comparison with this time last year, there has been a 2.4 percent rise across the UK selling new cars which is the first increase since April last year.
The Automobile Association, said: "The scrappage scheme has clearly borne fruit, but there is concern the money may run out soon. Governments elsewhere have extended such schemes because of the positive impact on both the economy and in helping to get drivers into cleaner, safer and more modern new cars." The Royal Automobile Club said: "We would like to see the government capitalise on the success of scrappage by committing to a second-generation scheme."
Business Secretary Lord Mandelson has insisted the scheme will not be extended, but it is thought the sooner the funding is exhausted, the greater the pressure on ministers to act to prevent sales plunging again. Nearly 84,400 new cars have been registered under the scheme using more than one quarter of its £600 million joint government-industry funding. The motor industry said the scrappage scheme accounted for more than one in five new cars bought last month.