New car sales rose 33% in January compared to the same month in 2013, according to figures from the Society of the Irish Motoring Industry.
A total of 22,927 new cars were bought in January, up 33% on last year and 8% up on the 21,309 cars sold in January 2012.
The Volkswagen Golf was the top selling model. Toyota was the biggest-selling marque overall with 2,796 units sold in January representing 12.2% market share.
Simi welcomed the sales numbers as evidence of an improvement in consumer confidence.
"Feedback from dealers suggests that consumer interest is continuing with a noticeable increase in showroom footfall and there certainly is a sense of optimism in dealerships that hasn't been apparent for many years," said Simi director general Alan Nolan.
The group, which represents car dealers, said an earlier budget last year may have contributed to higher levels of demand in January compared to last year. It also pointed to greater availability of finance - much of it provided by car makers.
"It is very early days so we are still cautious in relation to where the market might end up this year but there is a strong sense that we're now above the bottom and beginning to move upwards. It's nice to be able to say that for the first time since 2008," said Mr Nolan.