The UK's scrappage incentive scheme has helped restore consumer confidence, the head of a car retailer's trade group said on Thursday.

"Car sales figures confirm the most significant year on year monthly gain for 2009, the vehicle scrappage scheme has played a vital role in the return of consumer confidence," said Retail Motor Industry Federation (RMI) director Sue Robinson.

October new car sales rose 31.6% to 168,942 year on year.

Robinson said the scrappage scheme was having a positive effect on the whole market. "Dealers are reporting that the scheme is continuing to provide a halo effect for overall car sales, and is helping increase footfall into showrooms by general buyers as well as scrappage buyers."

Latest government figures show that 268,641 cars and light vans have been ordered through the scrappage scheme since it went live. With sales continuing to grow, the government's injection of a further GBP100m funding for the scheme was a very positive move for the industry, the RMI said. The extension it campaigned for was essential to ensure the retail motor industry continued to thrive at a time of economic uncertainty.

Robinson said: "These figures confirm the fourth consecutive monthly increase in registrations, car dealers and consumers alike are reaping the benefits of the improved market."