New car sales soared in October as buyers continued to take advantage of the government's "cash for bangers" car scrappage scheme.

New registrations rose 31.6 per cent compared with October 2008, with a total of 168,942 new cars sold last month, the Society of Motor Manufacturers and Traders (SMMT) said.

SMMT 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 per cent 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."

October was the fourth successive month that sales have risen. The first monthly rise in July followed 15 successive months of decline.

Despite the encouraging October figures, sales for the year to date - at 1,685,981 - are still down 12.3 per cent on last year's January to October total.

The scrappage scheme, which has now been extended to include another 100,000 vehicles, has particularly helped the sale of small cars, with the supermini sector rising 200 per cent last month. This includes Ford's popular Fiesta which passed the 100,000 sales mark in October.

And alternative fuel vehicles such as the Toyota Prius were 43 per cent up. Average new car CO2 emissions are also down 20 per cent compared to 1999 levels.

Best-selling cars of October 2009

Have you bought a car on scrappage? Is the extension a good idea? Have your say

View video footage of the UK's most popular car - the Ford Fiesta: