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The change normally produces the year’s peak in business but the Society of Motor Manufacturers and Traders says sales are likely to be down 10pc from last year’s corresponding level of 367,929 when the scrappage scheme began to make an impact.

Sales last month plummeted 17.5pc on an annual basis to 55,305 as the loss of benefits from the scheme, which ended in March, continued to depress business.

August is traditionally the weakest month of the year, accounting for just 3.3pc of annual sales but with private car sales down almost 38pc last month economists feel householders are now more cautious about buying ‘big ticket’ items.

Total sales in the first eight months at 1.3m were still more than 13pc higher than a year ago because of the boost provided by the ‘old for new’ scrappage scheme. Sales jumped sharply in the second-half last year after a weak first six months.

The SMMT expects overall sales this year will still top last year’s level and reach 2m for modest growth of 1.2pc but Paul Everitt, chief executive, acknowledges market conditions “will remain challenging for the rest of the year.”

Sales of mini, super-mini and models in the medium range lost most ground last month as the private motorist deserted the market but the top end grew while diesel fuelled cars took a record 52.6pc share of the business.

Ford comfortably remains market leader although sales are down 5.4pc to 184,037 in the first eight months and its Fiesta range the best selling model.