THE August car sales boom will last for at least another three years, even if the registration letter system is changed in the next few months, according to Society of Motor Manufacturers and Traders chief executive Ernie Thompson.

He said many leasing contracts ran over three years, which would result in an in-built inertia to change. Contracts which started in August would also finish in August - at which point the driver would need a new car. 'Those people could now say 'August isn't important so I can now change cars at 2.5 or 3.5 years instead,'' added Thompson.

It is believed that a consultation document will be issued within the next two months and that both the DoT and DVLA are keen to make progress sooner rather than later. Thompson warned, however, that the August boom would not vanish overnight because of contracts written by leasing companies with August in mind, and said he anticipated a three year time scale.

So will the end of the August boom make cars cheaper? Thompson didn't think so and explained: 'We don't know what extra costs will come because of environmental demands. Because of the recession we didn't recover the costs of adding catalytic converters and the whole European motor industry has suffered from horrible profit levels.'