More than 60,000 people have ordered new cars under the scrappage scheme, new government figures have revealed.
The inititiative was announced at the end of April and the new figures record orders up to 7 June.
Under the incentive car buyers are given £2000 off a new car if they scrap one that is ten years old.
Business secretary Lord Mandelson welcomed the figures, saying they were proof that the scheme is working.
"Consumers know a good deal when they see one. These figures speak for themselves," he said.
The government has set aside £300m for the scrappage scheme, with £1000 coming from the taxpayer for each discount. Scrappage is set to end in March 2010 or if the money runs out sooner.
A Society of Motor Manufacturers & Traders (SMMT) spokeswoman said: "The SMMT is encouraged by the figures and the positive start to the scheme. These orders should be reflected in the new car registration figures in the coming months."