Car sales have risen in Britain for the first time since April last year, with the scrappage scheme credited with providing the boost.
New car registrations rose 2.4 per cent in July to 157,149, an increase of almost 3800 on the same month last year, the Society of Motor Manufacturers and Traders reported today.
The scrappage scheme, which offers people scrapping car over 10 years old £2000 towards a new car, came into effect on 18 May.
"The impact of the scrappage scheme is clear and we are encouraged by the positive impact it has had," said SMMT chief executive Paul Everitt.
"The industry still faces a long road to recovery and we urge the government to take action to sustain economic recovery through easing access to finance and credit and delivering the loan guarantees set out by the automotive assistance programme," he said.
Total new car registrations still remain down 22.8 per cent year on year, a fall of 550,000.
The scrappage scheme is designed to run until the end of February 2010 or until the £300m put in by the government has been spent.
Official figures show that 144,308 cars were ordered under the scheme in its first 10 weeks.
If orders continue at that pace, the money will have run dry by early October, sparking calls from industry figures for the government to top up its investment.