Car sales increased by 4.5% last year compared to 2006.
The figure was recorded by the Society of the Irish Motor Industry, which said the increase had been boosted by SSIAs coming to fruition.
According to the society, 186,540 cars were sold in 2007 compared to 178,484 the previous year.
The past year's sales are the second highest after 2000, in which 230,804 cars were sold.
The SIMI's Director General, Alan Nolan, said that the figures proved Ireland's economy was still outperforming other EU states.
