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Car sales boom during scrap-bonus

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There could be a surge in car insurance applications in Germany after car sales boomed with the help of a new car-scrapping bonus.

Sales reached their highest level since the country's reunification in the early 1990s and in March new car registrations were up 40% on the year to 401,000, the VDA group said.

The industry group added that over the whole of the first quarter new car registrations were up 18% to 868,100. February had already seen a 2% increase in sales before the March boom.

The bonus scheme, where people who scrap their ageing cars and buy new ones are given a £2,300 bonus, is part of a government plan to stimulate the economy.

In total £1.3 billion was budgeted by the government to cover about 600,000 sales but its success is likely to see that figure expand to allow it to run to the end of the year.

Matthias Wissmann, VDA chairman, said: "Consumers' concern about an early end to the... bonus apparently led to a rush by buyers in March."

This year's sales in Germany are now expected to be "significantly over" last year's level of 3.09 million cars, VDA added.

© Press Association 2009