A 30.9 per cent fall in new car registrations in January has led to calls for the government to introduce trade-in incentives.
The Society of Motor Manufacturers and Traders wants the UK government to offer loans or grants to motorists trading-in their old car for a new one.
A similar scheme in Germany is offering motorists £2200 towards a car up to 12 months old when trading-in a car more than nine years old.
So far, it has boosted the German car market by £350,000.
January’s biggest-selling car was the Ford Fiesta, which sold 8833 units, followed by the Ford Focus and Vauxhall Corsa, which sold 5805 and 4550 units respectively.
Market share for diesel cars increased by 0.7 per cent to 45.6 per cent, the second-highest rate ever, but diesel sales were still down overall by 29.7 per cent.
Alternative-fuel cars suffered even more, dropping by 47.4 per cent.