More than 35,000 new cars have been sold under the scrappage scheme since it went live on May 18.
Government figures show that one in five new cars are now sold to buyers taking advantage of the 2000 discount available to drivers with a 10-year-old car to trade in.
Industry sources suggest that small cars have taken the lions share of sales under the scheme.
Hyundais i10 city car and i20 supermini have both been popular with buyers. Tony Whitehorn, Hyundai UKs managing director, said: Our experience shows the scrappage scheme has really caught the imagination of the car-buying public.
For many, it is an opportunity to buy their first ever new car, and is enormously exciting.
The Government has set aside enough money to fund 300,000 vehicles, so theres still enough money left for almost 265,000 more buyers to take advantage of the scheme.