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Spain Renews Car-Subsidy Program

MADRID, Oct 17 (Reuters) - Spain on Thursday said it would extend for the third time a scheme to subsidise purchases of new cars that has helped reverse a fall in sales in the country.

Sales of new cars grew in Spain in September, and in France as well, raising hopes that the worst may be over for a western European auto market enduring its weakest year in two decades.

Spain's auto industry group Anfac said new car sales in the country jumped 29 percent to more than 45,000 cars last month. It cited the impact of government subsidies as well as other factors including a statistical effect after a sharp drop in sales in September 2012, when the centre-right government raised its main VAT rate by 3 percentage points to 21 percent.

Treasury Minister Cristobal Montoro said on Thursday the government would add another 70 million euros to the scheme after an initial 220 million euros announced in 2012 and earlier this year ran out.

Under the scheme, people who scrap their old car and buy a new one get a rebate of 2,000 euros, half from the government and half from the carmaker. (Reporting by Blanca Rodriguez; Writing by Julien Toyer; Editing by Hugh Lawson)