Confusion over diesel policy, a cut in incentives for plug-in hybrids and the threat of Brexit all weighed on demand for cars in the UK in May.
Registrations fell 4.6 percent to 183,724, according to data from the Society of Motor Manufacturers and Traders.
"Confusing policy messages and changes to incentives continue to affect consumer and business confidence, causing drivers to keep hold of their older, more polluting vehicles for longer," SMMT's CEO Mike Hawes said in a statement.
Sales of diesel vehicles fell 18 percent last month, the 26th consecutive monthly fall, giving the powertrain a 27.7 percent market share, while gasoline was up 1 percent to a 65.7 percent share. Alternatively fueled vehicles, such as electrified vehicles, increased 12 percent to give them a 6.6 percent market share.
The UK has said it will cut the incentives for plug-in hybrid vehicles as it focuses on full-electric models, sparking dismay from some observers as automakers already face declining sales in Europe's second-biggest car market.