The car-scrappage scheme has reportedly resulted in 35,000 new cars being ordered since it was launched a month ago.
The £2,000 discount, an attempt by the Government to revive ailing carmakers, is available for 10-year-old vehicles traded in for new cars and small vans.
In the UK, the recession has led to 11 consecutive months of decline in new-car sales, resulting in job losses and production cutbacks across the industry.
But now, says Society of Motor Manufacturers and Traders boss Paul Everitt, the scrappage scheme is "enticing car buyers back into the showrooms".
All makes of cars have been ordered - with London black-cab taxis much in demand - which has led to a tenth of the Government's £300 million subsidy now being spoken for.
Says a spokesman for the Department for Business, Enterprise and Regulatory Reform: "We are really pleased that the scheme seems to be delivering a boost so early in the scheme."
Most of the teething problems, including top-selling company Ford initially refusing to take part, have now largely been overcome.
© Press Association 2009