The National Franchised Dealers Association (NFDA) has requested a meeting with Government to discuss an extension of the scrappage scheme.

Paul Williams, NFDA chairman said an extension was vital.

He said: “To say the scheme has been successful since its introduction would be a mass understatement.

“With the retail economic climate still fragile and an increase in VAT scheduled for January 1, 2010 an extension of the initiative is vital.”

Williams said the VAT earned on the sales from the scrappage scheme meant that it has made it a self funded scheme for the Government.

He added: “Indeed, if VAT were to increase Government could be in receipt of a surplus.”