Nearly 30,000 new cars were licenced in January of this year, which was a rise of nearly a fifth on the same time last year.
According to the figures released by the Central Statistics Office, the licensing of second-hand cars also rose by over a quarter.
The figure for new cars was up by 19% on last year with second car sales increasing by 28%.
The total number of vehicles licenced in January 2007 increased by over 6,000, or 21.1%, as compared to January 2006.
Toyota was the most popular make of car with over 4,000 units sold followed by Ford and Volkswagen. Toyota also topped the list of second-hand cars.
Last month, Dublin car dealers sold 475 Mercedes Benz, which is more than two an hour.
The most popular engine size was 1301 to 1400cc. However, sales of cars above 2.4 litres grew by almost 20% to 1,806.
