The Government is extending its vehicle scrappage scheme, it was announced this afternoon.

Business Secretary Lord Mandelson, speaking at the Labour Party conference, said: "Today, I am extending our popular car scrappage scheme with extra money for an additional 100,000 cars and vans."

The initiative had been due to end in February, or when the £300m the government allocated towards the scheme runs out, whichever happens first (see the Car Buying guide).

Under the scheme, motorists receive a £2,000 discount to trade in cars older than 10 years for new models.

Critics suggest you're better off buying a second-hand car given vehicles typically lose value so quickly that the £2,000 saving is soon wiped out.

Further reading/Key links

Cheaper motors: Car Buying
Drive down fuel costs: Cheap Petrol & Diesel
Find cheap filling stations: PetrolPrices.com
Mandelson's announcement: Full speech