UK dealers saw an 11.5% increase in new car registrations in January to 143,643 units, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).
This was the third month of double digit growth in the past four months and the 11th successive monthly rise.
The SMMT said the boost came from private registrations which increased by 15.9%.
As a result of the strong start to the year, the SMMT has revised upwards its full year forecast for 2013 and 2014, after the better than expected growth in 2012.
The market is expected to rise by 0.6% to 2.057 million units in 2013 and by 2.6% to 2.11 million units in 2014.
Mike Baunton, interim chief executive of the SMMT following Paul Everitt's departure at the start of the year, said: "The new car market has started the year confidently with registrations lifted by a solid rise in private demand.
"The new car market posted its 11th successive month of growth with motorists attracted to forecourts by the latest models and competitive deals on offer.
"Building on a strong performance in 2012, the SMMT has increased its market forecast - we anticipate a modest rise over the year, followed by further growth in 2014."
Registrations of all fuel types rose in January. Petrol cars saw their market share rise, in line with increased volumes by private buyers and of smaller cars, both of which tend towards petrol cars.
Most segments recorded growth in January, with the mini, dual purpose, lower medium and MPV segments posting double digit gains, largely on the back of new model activity over the past 12 months.
Head to the smmt.co.uk website to download the full new car registration figures for January 2013.
Sue Robinson, Director of the RMI National Franchised Dealers Association (NFDA), said: "Although the NFDA don’t expect to see major growth in the UK new car market during 2013 we do expect it to be stable.
"We expect the market to be supported by strong manufacturer deals and offers that will encourage consumers to buy.
“We also anticipate some pent up demand from consumers who have put off buying a new car due to economic conditions but can no longer delay as their car ages with consequent effect on repair and maintenance costs. Many of these customers will look to buy a well priced smaller vehicle that are cheap to maintain and run.”