The scrappage scheme accounted for 12.2% of registrations in March
UK new car sales in March increased by 26.6% compared with the same month last year, industry figures have shown.
In March, 397,383 new cars were registered, the Society of Motor Manufacturers and Traders (SMMT) said.
But it said March last year had been "particularly difficult", when sales were more than 30% down on March 2008.
Looking ahead, the SMMT said that while demand will continue to improve slowly, it expects sales to fall now that the UK's scrappage scheme has finished.
The scrappage scheme, which offered new car buyers a £2,000 discount if they scrapped a car older than 10 years, accounted for 12.2% of registrations in March.
It came to an end on 31 March.
March is traditionally a strong month for car sales as it sees the introduction of new number plates.
"The UK motor industry has enjoyed a better-than-anticipated first quarter of 2010," said Paul Everitt, SMMT chief executive.
"A strong March performance was underpinned by the scrappage incentive and improving demand in the fleet sector.
"The coming months will remain challenging and headline registration numbers are expected to dip.
Although the scrappage scheme provided a much-needed boost to the UK car industry - government figures show at least 330,000 cars were sold under the scheme - the latest sales figures are still well below the levels seen in 2008.
In March 2008, new car sales totalled 451,642.
But vehicle sales around the world plunged in 2009 as demand dropped during the global financial crisis.