A total of 397,383 new cars were sold, 26.6 per cent more than in March 2009, according to the Society of Motor Manufacturers and Traders (SMMT).
The car scheme has helped to revive the car market since it was introduced last May.
The SMMT said the scrappage scheme accounted for 12.2 per cent of all new registrations last month, and that although the scrappage scheme had ended, a further 20,000 vehicles would be delivered in the coming months under the initiative.
However, it said economic uncertainty and the end of the scheme would result in “a marginal decline” in sales over the rest of the year.
SMMT chief executive Paul Everitt said: “The UK motor industry has enjoyed a better than anticipated first quarter of 2010. A strong March performance was underpinned by the scrappage incentive and improving demand in the fleet sector.”
He added: “The coming months will remain challenging and headline registration numbers are expected to dip, but underlying demand will continue to improve slowly.”