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Scrappage scheme enters final phase

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The Government's car scrappage scheme has entered its final phase, with its £400 million fund due to run out by the end of March.

Ministers said the scheme, which offers a £2,000 discount on new models that are bought in exchange for older ones, will not be extended any further.

The scheme was launched last April to revive the automotive industry and has seen 355,000 orders for new cars and vans since then.

To ensure a smooth closure to the scheme, motor firms have been allocated "shares" for 50,000 potential further sales.

Business Secretary Lord Mandelson said: "This is last orders for the scrappage scheme. Car owners need to move quickly to avoid disappointment if they want to buy a new car at a discount.

"Industry figures have showed the benefits that the scrappage scheme is continuing to deliver to the automotive sector and beyond. It is great news that in January scrappage helped the industry to achieve its biggest output gain since May 1976."

The final phase of the scrappage scheme will see participation from 37 firms, who will be given an allocation of remaining potential orders based on consumer demand.

© Press Association 2010