DEMAND for new cars rocketed last month as new reports show UK car prices are now among the lowest in Europe.

During June, the new car market rose by 15.8% year-on-year to 240,174 units, a new record for the month. Fleet registrations jumped 14.9% to 103,702, while business sales to sub-25 vehicle fleets rose 18.8% to 24,859.

Together, fleet and business sales accounted for 53.6% of the new car market last month. Private car sales were 111,613, a rise of 16.1% year-on-year.

For the year to date, fleet sales are down 1.5% at 549,734, while business sales are up 6% to 132,676. Private registrations are up just 0.1% at 665,075.

Overall, the new car market is now on a par with 2002's all-time record of 2,563,631 sales, although the Society of Motor Manufacturers and Traders (SMMT) believes that by the end of the year, the market will be 4.4% down at 2,450,000.

By the end of the year, diesel is expected to account for 29% of overall sales, or 710,000 units. However, last month 31.6% of sales were diesels.

SMMT chief executive Christopher Macgowan said: 'In a month in which independent sources position UK car prices as the second lowest in Europe, it is great to see such a strong June total.'

Among the fleet sales winners was Vauxhall, which enjoyed a record volume for fleet sales and took first place overall for the third time this year. Its van sales were up 59% from 2,808 last year to 4,466.