The British Government has extended the popular car scrappage scheme which compensates motorists for swapping an old car for a new more-efficient one.

The popular scheme has been extended by one month, from the end of February to the end of March.

Under the scheme, motorists are offered a discount of up to 2000 pounds on swapping a more than 10-year old car with a new model.

According to estimates, as many as 330,000 new cars have been purchased under the car scrappage scheme. The figure is expected to reach 400,000.

Speaking on the topic, Business Secretary Lord Mandelson said, "Against the background of the economic downturn the scrappage scheme has proved a great success, driving UK car sales, protecting jobs and supporting the supply chain.”

Such schemes were also introduced in other countries such as the United States and France.

In Britain, the scheme was introduced in April last year to boost declining car sales in wake of recession.