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UK car sales benefit from government car scrappage scheme

It has been revealed that a massive surge in new car sales in the UK in March led to an increase of 26.6% on the previous month. This was purely and simply because of the government's car scrappage scheme which offered significant incentives to those looking to scrap old vehicles and acquire new more efficient replacements. While the increase in new car sales was impressive the figure of 397,383 is well down on the 10 year average for March of just over 418,000 new registrations.

However, even when you strip out the perceived impact of the car scrappage scheme the increase in new car sales for March was still in the region of 17%. When you consider the car scrappage scheme was a win win situation for all involved it seems highly likely that it will return at some point, no matter which party is in power after the election.

There were initial reservations regarding the government car scrappage scheme but these appear to have been unfounded with a significant increase in activity levels within the UK car industry. Whether this improvement in sales will follow through the rest of 2010, now the scheme has ended, remains to be seen although there is no doubt it has saved many car manufacturers and car retailers from further financial difficulty.

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