Sales of new cars in Britain reached almost two million last year according to the Society of Motor Manufacturers and Traders.
Although the number of registrations was the lowest level since 1995, sales in the latter half of the year were boosted by a government "scrappage" scheme.
Full-year sales fell 6.4% from 2008's total to 1,994,999 vehicles.
New registrations in December rose by 38.9%, helped by consumers looking to beat the VAT increase.
Excluding sales made under the "scrappage" scheme, registrations rose by 10% in the month.
The scheme, which offers an incentive of £2000 to scrap old cars, has accounted for more than a fifth of all new car registrations since it came into effect on 18 May, 2009.
In the first six months of the year, new car sales fell by 25.9%. In the second half of the year, they rose by 21%.
The BBC reports the Ford Fiesta was the best-selling model of the year, followed by the Ford Focus.
However, sales are expected to retreat when the scheme comes to an end.
