New and used car handovers were down 29% in March as supply challenges continue to “plague” the automotive retail sector.

Overall sales increased 4.5%, during the key plate-change month, spurred by a 13% boost in enquiries, according to data from iTrackLeads. Test drives were down by 1.6%, meanwhile.

Adrian Favill, director of iTrackLeads, said: “Against the backdrop of the squeeze on disposable income many households are facing, it’s heartening to see the number of enquiries continue to rise because it is a robust indicator to overall demand.

“While sales also increased against 2022, the supply challenges that plagued the market last year haven’t gone away. It’s essential that dealers remain close to their customers and manage the sales process over prolonged sales cycles.”

SMMT chief executive Mike Hawes said that UK automotive was “facing the future with growing confidence” after 74,441 new cars joined the nation’s roads last month, with freer new cars supplies boosting registrations 26.2% year-on-year.

Car retailers from across the UK told AM how they were working to deliver strong March trading, despite continued new car supply issues.