Scrappage to end six months early?

The government’s ‘cash for bangers’ scrappage incentive could end six months early due to popular demand, Auto Trader can exclusively reveal.

And the government has denied the scheme could be extended.

More than 35,000 new car orders were recorded in May 2009 after the scheme began. That’s more than ten per cent of orders the government budgeted for.

If the rate of 3,181 sales per day continues, funding for the scheme could dry up by August 20.

Could you scrap your car for £2,000? Find out on Auto Trader’s scrappage site

A spokesperson for the Department for Business Enterprise and Regulatory Reform said: “The scrappage scheme has a limited budget and is designed for the whole motor trade.

“It was quite clearly stated this was a limited-time scheme and we don’t have any plans to extend it.”

Tom Barnard, PR Manager for Hyundai, said: “Our feeling is since the government is making profit on new cars over £7,600 sold under the scheme, we would be very surprised if they didn’t extend it.”

Hyundai has taken almost 9,000 orders since the scheme was announced – 30 per cent of their total sales figure last year.

Buyers may not be able to order a 59-plate car in September on the scheme if it ends in August.

Once the £300 million government funding has been used (enough for 300,000 eligible buyers), the scheme will end. If it is not used up, the scheme will come to a close on February 28, 2010.

Sue Robinson, Director of the Retail Motor Industry Federation said: “What we may be seeing here is the initial rush.

“It’s possible this will calm down to a steadier rate of cars bought through the scheme. When more definitive figures emerge, we can see how long the scheme will run for.”

The scheme offers buyers £2,000 towards the cost of a new car in exchange for scrapping a ten-year-old vehicle.

Half of the £2,000 discount comes from the government, and the other half from the car maker.

Phillip Harrison was one of the first drivers to scrap his old car for a £2,000 bonus.

Are you scrapping your motor for a new one? Have your say on the Auto Trader Blog