SECOND-HAND car dealers in Oxfordshire claim the Government’s scrappage scheme is ruining their trade.

The £300m scheme, which has boosted new car sales in the recession since it was introduced in May, enables people to take advantage of a subsidy of up to £2,000 when they buy new vehicles if their old car is more than ten years old or their van more than eight years old.

Nationally, more than 260,000 buyers have taken advantage so far.

However, second-hand car dealers claim the scheme has slashed their profit margins and killed off the market for first-time buyers.

This month the European Central Bank also warned the scheme was distorting the market and would reduce income for car manufacturers next year and beyond because people were buying cars earlier to take advantage of the discount.

Martin Cook, who owns Chryscourt in Long Crendon, near Thame, had to lay off his sales manager three months ago because of a 30 per cent slump in sales.

He said: “These are the worst trading conditions I’ve known in 40 years. I just can’t get my hands on good used cars nowadays.

“Scrapping a perfectly good car is not environmentally friendly and the real old bangers are not coming off the road because these people still can’t afford a new car.”

Six weeks ago the Government announced plans for £100m in extra funding for its scheme ,meaning V-reg cars registered before March 2000 were also eligible.

It has also emerged that foreign car makers have been the main beneficiary of the scheme because nine out of 10 cars bought so far were manufactured abroad.

John White, who has run White’s Cars in Hollow Way, Cowley, for 48 years, said: “I’ve had loads of people in this week looking for older cars, but we can’t get them. All the nice small old cars have been scrapped – it’s a crying shame. It has cut our margins too because all the dealers are fighting over a smaller number of good old cars.

“A car that cost me £2,350 last year now costs me £3,000 but I can’t sell it for any more.”

Anton Bazylkiewicz, sales manager at Lodge Hill Garage in Abingdon, said his firm had moved into the prestige car market due to the lack of older cars.

He said: “Good, old, cheap cars have become non-existent.”

Tony Dunn, owner of Dunn Car Sales in Cowley Road, said the scrappage scheme had made things more difficult but that old cars were also harder to find as people were holding on to their current vehicles for longer.

The Cowley plant has sold 3,329 Minis as a result of the scheme.

BMW spokesman Angela Stangroom said: “Scrappage schemes are one way of providing a short term stimulus to the market but are not necessarily a long term solution.”

Oxford East MP Andrew Smith added: “The scheme has made a key contribution to Mini sales and to keeping up jobs at the car plant through the recession.”

A spokeswoman for the Department for Business, Innovation and Skills, said: “Second-hand dealers that have contacted us have reported improved sales figures because scrappage has increased the interest in buying cars generally.”