Car sales continued to buck the economic trend, with private demand pushing last year's sales to their highest level since 2008.

The rate of growth was the fastest for 11 years, according to the Society of Motor Manufacturers and Traders (SMMT).

It reported a rise of 3.7% year-on-year in car sales in December to 123,577 units.

This followed a year-on-year increase of 11.3% in November, meaning car sales rose by 5.3% overall to over two million units in 2012.

By contrast, car sales fell by 4.4% over 2011 as a whole.

SMMT Chief Executive Paul Everitt said innovative, fuel-efficient cars had kept buyers in showrooms.

"Looking ahead to 2013, we anticipate the market will hold firm, with manufacturers and dealers working hard to deliver quality and value to motorists," he said.

Private car sales continued to lead demand with a gain of 12.5% year-on-year last month.

However, fleet sales were down by 0.3% year-on-year, while business sales fell by 16.5% year-on-year, completing a very weak performance for this category in 2012.

The overall increase in private sales during 2012 was 12.9% to 929,440 units, contrasting with an overall decline of 14.1% in 2011.

The share of private car sales in total sales rose to 45.5% last year after dropping to 42.4% in 2011, from 47.2% in 2010.

Dr Howard Archer, Chief UK Economist at IHS, said conditions facing the motor industry were still far from easy at the start of 2013.

"Consumers [are] still confronted by significant headwinds and businesses under pressure to contain costs," he said.

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