The total number of new cars sold this year has hit 1,555,309, up 6.5pc on the same point 12 months ago, and a record for this point in the year.

However, many in the industry have questioned how long the trend will last, suggesting that the market is becoming saturated. The SMMT itself noted that what it called the “modest” increase reported in July hinted at a “more stable” second half of the year.

Mike Hawes, the society’s chief executive, said: “While more moderate than in recent months, July’s rise in new car registrations is good news, and indicative of what we expect for the remainder of 2015.

“With demand having reached a record high in the first half of the year, we anticipate more stable growth in the coming months.”

Professor David Bailey, an auto industry expert who teaches at Aston University, said: “The recovery of the British car industry was initially powered by private buyers but that’s now switched over, with fleet buyers driving demand. Corporates had been holding off buying cars but the cycle of updating fleets every two or three years is now what is supporting sales.”

He admitted he was surprised sales have risen for such a long period, and said that the number of dealers “self-registering” cars – effectively buying vehicles themselves before selling them on to customers – so they can hit their targets is an indication of the pressure they are under from manufacturers.

“We must be near the limit for the UK car market – the innovative and attractive financing deals and personal contract plans will be hit by interest rates when they go up, and soon there’s going to be a lot of two or three-year old cars bought on these schemes coming back into the market, which will affect residual values,” Prof Bailey added.

Car finance provider Black Horse Financial said the British auto industry’s “success story” is likely to continue as long as interest rates remain low, though it expects the rate of growth to moderate.

Howard Archer, economist at IHS, said sales over the first part of the year were "solid" but cautioned July’s rise was "only half the average increase of 6.5pc over the first seven months of the year. It is unrealistic to expect car sales to keep churning out strong year-on-year growth rates given that have now risen for a record 41 consecutive months and are now coming from a high base."

However, the anaemic growth in many European car markets, combined with sterling’s strength, means that many foreign manufacturers are pushing their cars into the UK market with aggressive financing deals as it is one of the few countries with an active auto market and the exchange rate means they can still make a profit.

Buyers’s tastes in cars are also changing. The SMMT data showed that over the past decade, sales of sports utility vehicles (SUVs) and crossovers, vehicles which blur the line between cars and SUVs, have risen by almost 90pc. Demand for “supermini” size cars has also risen by almost a quarter. Falling out of style have been “traditional” medium size sector.

“After the financial crisis there was a squeeze on real incomes and people bought smaller cars which are more fuel efficient,” said Prof Bailey, adding that while the price of oil has fallen recently, petrol prices at the pump remain at historically high levels.

The rise of SUVs and crossovers is “ultimately about fashion” he said, saying that buyers are attracted by these vehicles’ looks, high ride height which gives better visibility and sense of safety, as well as the fact that they tend to be larger, providing more room for passengers.

Ford’s Fiesta once again retained the title as Britain’s best selling car, a title it has held since before the recession. Ford sold 8,504 Fiestas during July.