New car sales in the UK jumped year-on-year 38.9 per cent in December as people rushed to take advantage of Government-backed scrappage scheme.

Figures compiled by the Society of Motor Manufacturers & Traders revealed that number of new cars sold last month jumped to 150,936.

Scrappage scheme and the return of VAT to its pre-recession level of 17.5 per cent from the start of 2010 boosted new car sales in December.

Commenting on the issue, SMMT chief executive Paul Everitt said, "The December new car market was boosted by the scrappage incentive scheme and consumers looking to avoid January's VAT increase."

Scrappage scheme allowed car owners to swap at least 10-year old vehicle with a more fuel-efficient one for a discount of 2,000 pounds.

However, new car sales over the full year of 2009 remained at 1,994,999 units, lower by 6.4 per cent as compared with previous year.