The number of new car registrations fell by 17.5 per cent in August, compared with the same month the previous year, to 55,305.
The fall was attributed to the high volumes sold through the scrappage scheme, which accounted for 25 per cent of sales last August.
The Society of Motor Manufacturers and Traders said it was the second monthly fall in a row and that figures are likely to drop continually until the end of the year.
In the full year however the number of registrations is expected to be just over two million, up 1.2 per cent from last year.
August is expected to be the low point for car registrations in the year, with only 3.3 per cent of annual sales usually accounted for ahead of the change of number plates in September. The most popular model in August and in the year so far was the Ford Fiesta.
Paul Everitt, Chief Executive of the SMMT, said, "New car registrations were down 17.5% in August and conditions will remain challenging through the rest of the year. The industry enjoyed a better than expected first half of the year and, despite the difficulties, SMMT is forecasting that new car registrations will close just ahead of 2009 figures."