A combination of the Government’s “cash for bangers” scrappage scheme and a rush to beat next year’s 2.5 per cent VAT increase combined to give car makers another buoyant month.
According to the Society of Motor Manufacturers and Traders the scrappage scheme – in which anyone trading a 10 year old car gets a £2,000 subsidy towards a new model – accounted for a fifth of sales in October.
This seems to have been confirmed by the figures, which showed that households accounted for more than half of cars sold – at least 10 per cent more than in a normal month.
The Ford Fiesta continued to be Britain’s best-selling car and small models appear to have dominated sales, reflecting a trend towards those with lower running costs.
October was the fourth month in succession in which sales rose compared to the same period in 2008. The increase was rise was the biggest recorded by the industry since 1999.
Scrappage is still having an impact as one would expect,” said Mike Allen, a motor industry analyst with the stockbrokers, Panmure Gordon. “But with January’s VAT increase having been confirmed, people are buying a car now to save paying the extra tax.
“Given the cost of more luxurious models, it makes sense to bring the purchase forward, before the price of the car goes up.”