Car registrations fell year-on-year by 7.9% in March, despite the availability of new 11-plates, latest figures have shown.
A report by the Society of Motor Manufacturers and Traders (SMMT) said that a total of 366,101 new cars were sold last month.
However, the report said that last month's figures exceeded expectations and rose annually by nearly 6%, if the impact of the Government's car scrappage scheme last year is excluded.
The sales dip in March marked the ninth consecutive month of decline and the SMMT warned it expects new registrations to fall further during this spring before recovering in the second half of the year.
New car sales for the first three months of this year totalled 558,336 - a fall of 8.7% - a development that will have been noted by car insurance companies.
The motor industry trade association said it expects the total for 2011 to be around 1.93 million cars, which would represent a dip of 5% on the scrappage-boosted year of 2010.
Paul Everitt, chief executive, SMMT, said: "The March 2011 figures demonstrate sustained demand in what is traditionally the biggest month of the year.
"Despite a dip versus 2010, the market remains on course to meet our forecast for the year, with motorists buying increasingly fuel-efficient and low-emitting vehicles across every segment."
The top-10 best selling models last month were Ford Fiesta, Ford Focus, Vauxhall Corsa, Vauxhall Astra, Volkswagen Golf, Vauxhall Insignia, Volkswagen Polo, Peugeot 207, Mini and BMW 3 Series.
© Press Association 2011