The UK scrappage scheme has sold 35,000 extra cars since its introduction under two weeks ago, according to the government.
This amounts to more than a tenth of the £300m allocated until March 2010.
Car sales have suffered due to the global economic crisis and scrappage was announced in the April budget in a bid to boost the industry.
The government said one in five orders in the first two weeks of the scheme were scrappage orders.
Ministers said they were “very pleased” with the take-up, although the industry remained cautious.
A spokesman for the Society of Motor Manufacturers and Traders said it was important not to get "too over-excited".
"We’ve seen indications that some manufacturers have had a positive increase in orders and we are encouraged by what has been announced. But we would like to leave it a couple of months to see how things develop," said the spokesman.
Business Secretary Lord Mandelson said: "The scrappage scheme has got off to a flying start. It has given car sales a major boost and offers consumers a great deal.
"Even after two weeks the sales figures are impressive. As it operates on a first come, first served, basis and cannot last forever, consumers should get in sooner rather than later for these great deals."