Big deals fail to boost new car sales

Latest figures show that new car sales continued to slump again in February - despite price cuts and plenty of deals available on new cars.

Society of Motor Manufacturers and Traders (SMMT) figures show that only 54,359 new cars were sold in last month, down 22 per cent or 15,251 cars on February 2008.

After months of falling sales there are now calls for a cash-for-scrap scheme that would see owners of older cars being offered a £2000 contribution towards a new car by the government. If approved, this incentive is likely to be offered with existing manufacturer promotions, which are currently better than ever. Similar schemes are in operation across Europe; last month the German market was up more than 21 per cent as car buyers took advantage of once-in-a-lifetime discounts.

Those without an older car to trade-in are being urged to buy now as prices are predicted to rise later in the year - once existing stocks at airfields and ports have been sold. With supply brought into line with demand through factory closures, manufacturers won't have to offer heavy discounts. Car makers that rely on cars that are produced abroad and imported into the UK - such as Ford - are warning that the low value of the pound may mean that they could soon raise prices again, just weeks after the last rise.

In contrast to the new market, used cars have been performing strongly since January. Dealers have reported another busy month and used values have started to rise slightly - especially on smaller, fuel-efficient models. Values of larger executive cars such as the BMW 5-Series and Audi A6 have begun to pick up after a big drop in 2008 with buyers realising they can buy a lot of car for their money. Prices of 4x4s are also increasing with renewed interest as people begin to realise some of them now present good value for money.

• More on cash for scrap plans

If you own a car that's 10 years old or more - and you're looking to buy - it's worth holding on a few weeks to see what you could be offered as an incentive to change. It's expected that the government could offer up to £2000 towards a new car. 

The proposal is being backed by the AA and some Manufacturers including SEAT as well as the Society of Motoring Manufacturers and Traders (SMMT) and Retail Motor Industry Federation (RMIF).

A final decision on when the scheme will run - and how much will be offered - is expect in the coming weeks.

Let us know your views on the proposals here >>>

• The best-selling cars in February

1 Ford Fiesta 3260 2 Ford Focus 3241 3 Vauxhall Corsa 2856 4 Vauxhall Astra 2754 5 Volkswagen Golf 1836

The worst performing manufacturers in February

1 Mitsubishi -76.56% 2 Chrysler -76.11 3 Jeep -63.16% 4 Kia -61.36 5 Daihatsu -45.63