Scrappage scheme extended again

The government?s £2,000 scrappage scheme has been extended for the second time.

It will now run until March 31 or when the funding dries up, extending the programme by up to one month.

Funding hasn?t been increased, leaving £70 million ? or 70,000 new cars ? available until the end of March. However with the new ?10? number plate arriving from March 1, this funding could dry up a lot earlier than usual.

This gives buyers more time to take advantage of the £2,000 new car discount offered by the scheme in exchange for a car at least nine and a half years old.

The government said the extra month will also give dealers more time to inform their customers and prepare for the exit phase of the scheme.

Cars bought using the scheme accounted for 17.8 per cent of new cars sold in January.

Business secretary Lord Mandelson said: ?Against the background of the economic downturn, the scrappage scheme has proved a great success.

?It has driven UK car sales, protected jobs and supported the supply chain for car manufacture at a time when this sector needed it most.?

The news comes as January car sales rose 29.8 per cent year-on-year.

The government originally launched the scrappage scheme on May 18, 2009 and the initial funding of £300 million was enough to scrap 300,000 cars.

On September 28, 2009, funding was increased to £400 million, allowing a further 100,000 cars to be scrapped.

A total of 330,722 new cars have been bought using the scrappage scheme so far.

View images of a Morris Minor saved from the crusher:

By Dominic Sacco, senior web journalist