A record number of vehicles for a single month were licensed in January, according to figures produced by the Central Statistics Office (CSO).
A total of 36,038 vehicles were registered for tax, beating the previous record of 35,331 which was set in March 2000.
The figures were boosted by a buying surge in private cars. More than 29,000 were registered in January, an increase of 19.2 per cent on January 2006.
According to the CSO, the best performing marques were Toyota, which sold 4,065 units. Ford also performed strongly selling 3,621 vehicles while Volkswagen came in third highest with 2,980.
Nearly 2,400 new BMWs and Mercedes were registered in the first month of the year.
However, the figures are only for vehicles which have been taxed and the Society of Irish Motoring (Simi) says new vehicle sales in January were actually over 46,000.
The industry's own figures show there has been a significant decline in the sale of larger SUVs which went from 1,371 in January 2006 to 1,185 last month.
The decline, though, may be due to customers waiting for new models to emerge on the market rather than any long-term trend.
However, sales of compact SUVs increased from 2,185 to 3,056 in the same period, mostly accounted for by strong performances by the new Hyundai Santa Fé and Toyota Rav4.
The best-selling car to date this year has been the Ford Focus which has sold 3,296 units.
Simi chief executive Cyril McHugh said the latest figures were excellent but not as good as 2000 when the millennium and the introduction of the NCT saw private car sales total more than 225,000 for the year.
Simi believes that strong growth has continued into February.
"The buoyancy of the economy is the key thing," Mr McHugh says.
"The SSIA is a factor, but that factor is probably going to come later in the year . . . the numbers of people in employment is the key thing. More people are going to and from work".
Fine Gael transport spokeswoman Olivia Mitchell said the figures were an indictment of the Government's failure to provide a proper public transport system for commuters.
She said car sales were strongest in Dublin and Cork, where there ought to be a proper public transport alternative.
"Clearly young people coming into the jobs market perceive that mobility, both social and economic, can only be assured through car ownership," she said.
"Infrequent bus services, and often the lack of any services at all, even in densely populated areas, leave huge numbers in our growing cities with no choice but to turn to car ownership."
