Scrappage scheme still boosting new car sales

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19 April 2010

The Government's continues to give a boost to the new car market according to an organisation representing new car dealers. The Retail Motor Industry Federation (RMI) reports that private buyers in particular are returning to the showrooms. Commenting on new figures from the Society of Motor Manufacturers and Traders that show new car sales in February up by 26.4% on the same month last year, RMI Director, Sue Robinson, said the decision to let the scheme continue until the end of March will continue to provide relief for sales in the first quarter of 2010. The sales figures also show eight consecutive increases in  and according to the Government 367,506 new cars have been ordered through the scrappage scheme. In February 19.6% of new car buyers took advantage of the scheme. Robinson went on to say the scrappage scheme has tempted private buyers back into the new and used car market. However, the business market is still fragile with many fleet and business operators delaying the replacement of vehicles. However, the beginning of 2010 has seen some positive signs in this sector with the fleet market up 17%. Despite this, Robinson warned that the continuing outlook for 2010 is set to be challenging with a level of uncertainty being caused by the imminent general election. It is likely that tax rises, public spending cuts and the end of the scrappage scheme in March will make consumers more cautious in their spending, certainly in the shorter term, she added.