“The success of the government’s scrappage scheme to date can be seen in its ability to draw people into showrooms and in the substantial increase in the October registration figures, which reveals a 31.6% increase on this time last year. Order books will remain strong in the near future with fulfilment and deliveries stretching into the New Year, potentially boosting business for some dealers during what is a traditionally difficult trading period. The year to date registration figures, although down 12.3% are more healthy compared to early predictions, and we can expect November and December to continue this trend.

“October’s sales were driven by private sector purchases and although this may be affected early next year with the end of the scrappage scheme, retailers will then be looking to bolster figures with fleet and business purchases. In the current market environment the used car sector continues to reap the benefits from continued supply shortages also.

“The extension of the scrappage scheme by an additional 100,000 units will further assist UK new car sales into the New Year, although caution will still remain when looking towards 2010 prospects. The ending of the scrappage scheme and the VAT increase at the start of the year, however, risks leaving the sector without any support at a time when consumers may be cautious over ‘big ticket’ purchases. An additional element of this risk is that purchases are brought forward into the final months of 2009 by deal conscious consumers.”