The Government-funded scrappage scheme will be extended, Lord Mandelson announced today.
Speaking at the Labour Party conference in Brighton this afternoon, the Secretary of State for business, innovation and skills, said that the scheme will be bolstered to fund an additional 100,000 new cars and vans.
He said: â€œThere are encouraging signs that the economy is picking up.Â But recovery remains fragile and uncertain, especially in manufacturing and one of its cornerstones, the car industry.
â€œOur car scrappage scheme has been so successful the money is running out.Â The industry has asked that the scheme be topped up.
â€œSo today I am extending our popular car scrappage scheme with extra money for an additional 100,000 cars and vans.â€
The news comes after the VBRA said the scheme has not had a negative impact on the aftermarket.
The financial incentive was due to end in February or when the original Â£300m fund ran out.
To date more than 200,000 new vehicles have been purchased using the incentive scheme and 200,000 old cars have been scrapped.