The Government's scrappage incentive scheme has boosted new car registrations for the third successive month, according to recent figures from the Society of Motor Manufacturers and Traders (SMMT).

In August, traditionally a quiet sales month ahead of the new registration plate in September, one in four new cars bought were attributable to the initiative. 

Paul Everitt, SMMT chief executive said the scrappage scheme is proving hugely popular with motorists and has provided an important boost to the UK motor industry.

He went on to say the scheme is clearly delivering environmental and safety benefits, in addition to incremental business for UK manufacturing and much needed demand for retailers.

Under the scheme the governments pays £1,000 towards the cost of a new car when a car over 10 years old is scrapped. This figure is then matched by the manufacturer - saving the motorist £2,000 on the cost of a new car.

Overall, new car registrations rose 6.0% in August to 67,006 units and registrations from private buyers and of small cars also showed strong growth.

According to Everitt, the figures provided welcome news for the UK motor industry but he warned that consumer and business confidence is still fragile and there are still significant risks ahead.

It is essential that these early signs of recovery are sustained into 2010, he added.