Car Sales Soar Thanks To Scrappage Scheme

New car sales are continuing to benefit from the Government's scrappage scheme.

Sales soared by 31.6% last month compared to October last year, the biggest monthly increase since the initiative was launched.

A total of 168,942 new cars were sold in October.

Society of Motor Manufacturers and Traders chief executive Paul Everitt said: "October has seen this year's biggest monthly increase in registrations, with the successful scrappage scheme accounting for over 20% of them.

"We have seen additional demand created by the extension of the scheme and customers wanting to avoid the VAT increase planned for January.

"Encouragingly, there has also been an increase in demand in the fleet and business sectors, which will be critical in sustaining recovery next year."

The October increase was the fourth successive month that sales have risen.

But overall sales are down - 1,685,981 cars have been sold for the year to date, which is 12.3% lower on January-October 2008.

The car scrappage scheme was introduced to boost the car industry as it struggled through the recession.

Similar schemes have been introduced across Europe.

American car giant General Motors has decided not to sell Opel and Vauxhall in part because of rising car sales across the continent.