The March plate-change saw new car registrations rise by 1.8% with 372,835 units sold and helped boost Q1 volumes by 0.9%.
According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), the rise in March registrations was 20,000 units or 6% above industry expectations.
Private registrations showed one of the best monthly increases in the past two years, up 7.4% in March.
March typically accounts for 18% of annual volumes, but the 2012 outturn would represent 19.4% of SMMT’s full year forecast of 1.92 million units (set in January).
The growth in registrations in March, comes on top of a weak 2011 performance. Registrations in the month still remain some 17% off the 2007, pre-recession, market total.
Paul Everitt, SMMT chief executive, said: "The important March new car market performed above expectations rising 1.8% to 372,835 units, boosted by the third consecutive month of retail growth.
"Domestic demand for new cars is showing signs of recovery with private buyers increasingly returning to take advantage of a wide range of excellent products and, this month, the new 12-plate."
The market shares for diesel and alternatively-fuelled vehicles continue to rise, reaching 50.4% and 1.5% respectively in quarter one, with volumes up 4.7% and 5.6% respectively on 2011 levels.
Supermini registrations rose in both March and Q1, to account for 39.1% and 37.7% respectively of the market. The dual purpose, specialist sports, executive and lower medium segments showed the best growth in March.
The Ford Fiesta was the best-selling model in both March and over the first three months of 2012.
Registrations of UK-built cars rose by 12.3% in March, as their market share rose to 14.6%, from 13.3% a year ago.
Sue Robinson, director of the RMI National Franchised Dealers Association (NFDA), said: "March is typically a strong month for new car registrations with the March plate change boosting sales.
"However the strong increase in private registrations shows some signs of economic recovery with consumers feeling confident enough to commit to purchasing a big ticket item.
“In order for the market to remain stable the Government should offer support by reviewing schemes that could improve consumer confidence and boost spending.”