More than half the money earmarked for the government’s “cash for bangers” scrappage scheme has been used up, according to figures from the Department of Business.

So far, 154,927 cars have been bought under the programme, which aims to breathe new life into the UK’s ailing car industry. The government has promised to underwrite 300,000 deals altogether in which motorists receive a £2,000 discount off a new car when they trade in a car over 10 years old.

Half of the cash is provided by the treasury, with the car industry putting up the rest.

The scheme has been most popular in the South East of England, which accounted for 18% of deals under the programme. 12% of purchases were made in the East of England, with 11% in the North West and South West.

Last week the motor industry reported the first increase in car sales in 15 months. The rise has boosted morale in the industry, which has started taking on extra workers again after a year of job cuts.

New cars bought under the scheme have also been shown to emit an average 25% less carbon than the model they have replaced.

The AA welcomed the figures, and encouraged motorists to take advantage of the scheme before the £300 million advanced by the government runs out.

“With the September new registrations and people not wishing to miss out with grants going fast, there is still plenty of customer potential in the scheme,” a spokesman said.

“The Government may now have to consider how it can fund an extension if the benefits to the car industry, supporting businesses and the environment make such a move hard to resist.”

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