The Government’s “cash for bangers” car-scrappage scheme is slowing the decline in new vehicle sales, figures out today revealed.

The number of new cars sold in the UK last month totalled 176,264 – a 15.7 per cent drop on the June 2008 figure, the Society of Motor Manufacturers and Traders said. But the month-on-month fall was the smallest since July 2008.

Dealers in Shropshire also reported a much more buoyant market compared with the start of the year, when it was a very gloomy picture in the marketplace.

Shropshire’s Volvo dealership said it was pleased with the result of the scrappage scheme. Since its launch William A. Lewis Volvo says it has sold over 50 new vehicles.

Dealer principal Adrian Frearson said customers had traded in different makes and models as interest in the scheme has increased week on week.

Amazed

“People who have visited the dealership are genuinely amazed at the discounts on offer,” he said.

“These equate to between £3,000 and £7,000 off the price of a new Volvo – far exceeding the £2,000 advertised.”

But he issued a word of warning as well: “Once Government money runs out then the scheme stops.”

At the Vauxhall dealership in Oswestry, Arthurs sales executive Mike Foster said the scrappage scheme was continuing to attract a lot of interest and bringing new customers.

“We are getting inquiries via the internet, over the phone and from customers calling at the dealership wanting to find out more about the scheme and how they qualify,” he added.

The car-scrappage scheme – in which owners of cars more than 10 years old get £2,000 off the price of a new motor vehicle when they trade in their old vehicle – was introduced on May 18, so the June figures represent the first full month when the initiative was in operation.

SMMT chief executive Paul Everitt said today: “We are now beginning to see the positive impact of the scrappage scheme translate into new vehicle registrations.”

He added: “We expect the pace of improvement to increase in the coming months, but we can already see the industry making steady progress on the long road to recovery.”

By Motoring Editor Sharon Walters