The scrappage scheme has helped boost the number of Britons opting for new, low-polluting models, findings indicate.
New car sales figures have highlighted that since the initiative was introduced, last month's results showed an improvement in sales compared with July last year.
The statistics show that 2.4 per cent more new cars were sold in July 2009 than in the same month in 2008, buoyed by the government scheme to reward motorists who agree to scrap their old, polluting vehicles.
Director of the Retail Motor Industry Federation (RMIF) Sue Robinson commented: "The impact of the vehicle scrappage scheme is now being felt, with thousands of cars bought by consumers via the scheme now on the road."
Eco car insurance policyholders may be increasing in number as more Britons opt to buy green vehicles under the scheme.
The figures mark the first rise in car registrations since April 2008 but the market is still down by 550,000 units over the past 12 months.
Ms Robinson said that it is private car buyers rather than businesses who are driving the motoring industry revival.
"Car dealers are reporting that the scheme is continuing to provide a halo effect for overall car sales, and is helping increase footfall into showrooms by general buyers as well as scrappage buyers," she added.
But the motoring expert went on to say that for sales to return to consistently positive levels, confidence needs to be encouraged among both general consumers and businesses.
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