Half of UK Scrappage Money Used Up

The British scrapping program is going impressively well and the money is slowly running out. Almost half of the cash offered by the UK government for the scrapping scheme has been used by automakers eligible for the programme, autocar.co.uk reported, with buyers placing no less than 121,737 orders for new cars.

The United Kingdom approved 300 million pounds to be used in the scheme, with consumers who agree to trade-in an old car receive a 1,000 pound incentive for buying a new and more efficient vehicle. Although the campaign is expected to run until March 2010, it may end much sooner, with some voices claiming the government could run out of money by September.

"The government has made it clear that no more will be made available for the scrappage discount. The idea was to kick-start the car industry and the scrappage scheme has certainly done that. However, there is only a finite amount of money available," a Society of Motor Manufacturers and Traders spokesman said. "We would advise potential new car buyers considering taking advantage of the scrappage scheme, to start the process as soon as they can."

As for the automakers eligible for the scheme, most of them recorded increased sales, with Ford leading the way thanks to its new Fiesta, followed by other automakers selling small cars, such as Hyundai and Renault.

"The scrappage incentive scheme is working well and has encouraged a lot more people back into showrooms," said SMMT chief executive Paul Everitt. "In the coming months, we will see an increase in the rate of deliveries and this will confirm further progress on the industry's long road to recovery."