Cash for bangers scheme extended to end of March

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The UK car scrappage scheme has been extended for one month - until the end of March.

The scheme, dubbed cash for bangers, was due to expire at the end of this month (or until funds ran out).

However no extra funds will be provided for the scheme but the Government said the extension would give dealers and manufacturers “more time to prepare for and operate the exit phase of the scheme”.

The £400 million initiative, which was launched last May to boost the ailing car industry, pays drivers of cars at least 10 years old £2,000 off the price of a new vehicle. The £2,000 grant is made up of £1,000 from the Government and £1,000 from the carmaker.

According to the Government, around 330,000 new cars have been ordered under the scheme, meaning 70,000 people will still be able to take advantage of the initiative.

Business Secretary Lord Peter Mandelson comments: “Against the background of the economic downturn the scrappage scheme has proved a great success, driving UK car sales, protecting jobs and supporting the supply chain for car manufacture at a time when this sector needed it most.

“If you’re considering buying a new car, you should place your order as soon as possible to avoid disappointment, because the budget is strictly limited,” he added.

The scheme, which has proved to be popular according to the UK car industry’s trade group, the Society of Motor Manufacturers (SMMT), was responsible for about a fifth of all new car registrations since its launch.

However, UK car production fell 30.9% in 2009, according to the SMMT.

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