The motor industry has enjoyed a rise in car sales for the first time in 14 months.
The Society of Motor Manufacturers and Traders (SMMT) revealed a total of 157,149 new cars were registered in July, which is 2.4% more than July 2008.
The Government's "cash for bangers" scheme, which was intoduced in May, has been attributed with helping to smash SMMT car sale forecasts by 10%. Sales to private buyers rose for the second month, increasing to 33.4%, which is the highest result since July 2004.
SMMT chief executive Paul Everitt said: "The impact of the scrappage scheme is clear and we are encouraged by the positive impact it has had, increasing new car registrations for the first time since April 2008.
Sales from January-July this year are still down 22.8% on the same period last year, despite the recent rise. The SMMT expects the volume of sales to fall further, by approximately 19%, to 1.73 million by the end of 2010.
Mr Everitt added: "The industry still faces a long road to recovery and we urge Government to take action to sustain economic recovery through easing access to finance and credit and delivering the loan guarantees set out by the automotive assistance programme."