Sales of new cars rose at their fastest pace for a decade, the Society of Motor Manufacturers and Traders (SMMT) has said.
There were 464,824 new car registrations, a rise of 17.7% on a year earlier.
The sales figure was also the second-highest on record since the introduction of twice-yearly car registrations in 1999.
In the three months to March car sales rose 13.7% to 688,122, the SMMT added.
March is typically the busiest month in the year - accounting for almost a fifth of all car sales annually.
The month also saw the biggest-ever rise in sales of alternatively-fuelled vehicles, with sales soaring 63.8% compared with a year earlier, to 8,713.
Mike Hawes, SMMT chief executive, said the "surprisingly strong level of growth" in sales was a reflection of intensifying consumer confidence.
"Given the past six years of subdued economic performance across the UK, there is still a substantial margin of pent-up demand that is contributing to a strong new and used car market," he added.
"We expect the market to continue to perform positively for the rest of the year, albeit at a more modest rate."
And Howard Archer, chief UK and European economist at IHS Global Insight, said the March sales figures were "extremely good news for the car industry".
He said they gave a "significant boost" to the UK's overall economic growth prospects for the first three months of the year.