New car registrations jumped 14.2% in October to 179,714 units, marking the 32nd consecutive month of growth, with fleet and business registrations accounting for 98,774 units – 55% of the market.
Compared to October, 2013, fleet and business registrations were up more than 13% on the 86,082 units registered last year and now stand at 1,100,586 units year-to-date.
That’s an increase of more than 8% on 2013’s year-to-date figures of 1,01,570 and equates to a market share of 51.5% so far this year.
Overall, the market now stands at 2,137,910 cars registered year-to-date – the first time the market has passed two million in October since 2007.
Mike Hawes, SMMT chief executive, said: "The October new car market outperformed expectations, with registrations showing the strongest growth in a month since March’s 18% rise. With economic confidence still rising, customers continue to benefit from attractive financial packages on exciting new models.
"We still expect the overall market to level off as we head towards 2015, but the exception to that rule will be alternatively-fuelled vehicles, demand for which will continue to accelerate."
Rising demand for alternatively-fuelled vehicles also continued, with market up more than 50% in both month and year-to-date.
KPMG says the acceleration of new car sales is now set to drive registrations over 2.5 million in 2014.
John Leech, KPMG’s UK head of automotive, said: "As PPI payments to consumers are tailing off, it is rising consumer confidence taking advantage of cheap car loans that is driving the market.
“Consumer confidence is still well below pre-recession levels so it may be that the market continues to power ahead this year before plateauing out in 2015.”
David Raistrick, UK Automotive Leader at Deloitte, said: “Looking ahead, the level of new car sales in the UK has probably reached a plateau, providing the economy remains on its current growth trend and employment levels are maintained.
“It will, however, be interesting to see how the recently announced pension changes will impact on the market, as individuals will have access from April next year to their pension pot value rather than receiving the managed monthly amount through an annuity.
“Notwithstanding this, however, our market analysis suggests that the UK car market is unlikely to be able to continue rising beyond current levels.”
At more than 42,000 units, the increase in alternatively-fuelled vehicles (AFVs) puts registrations 12,000 ahead of the full-year total for 2013.
Petrol-electric hybrid cars have long been the most popular choice for AFV buyers, but other variants are gaining in popularity. Registrations of pure electric cars have more than doubled over last year, while those of plug-in hybrid and range-extended models look set to quadruple by the end of 2014.
Key to this surge in popularity is a constantly increasing range of models available, says the SMMT. In 2011, buyers were restricted to just six plug-in models. Now there are 20 to choose from, in a range of body styles including coupés and SUVs.