The government should extend their car scrappage scheme, according to Trevor Finn chief executive of Pendragon, Britain's largest motor dealer.

The car scrappage scheme provides a £2,000 discount when a new car is bought and a car over ten years old is exchanged. The money is equally provided by the government and the car industry.

The government has set aside £300m for the scheme, of which over half has already been spent. It is estimated that money for the scheme will run out in November.

Mr Finn was critical of the scheme when it was implemented in April but now believes that it is an essential element for the car industry to return to profitability and build on the first rise in new car sales in July for 15 months.