The new car market has declined for a seventh consecutive month, industry figures show.
Just over 158,000 new cars were registered in October, down 12.2% on the same month last year, according to the Society of Motor Manufacturers and Traders (SMMT).
The organisation blamed a fall in consumer confidence for the drop in demand.
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Some 2.2 million new cars have been registered so far this year, a decrease of 4.6% on the same period in 2016.
SMMT chief executive Mike Hawes said: “Declining business and consumer confidence is undoubtedly affecting demand in the new car market but this is being compounded by confusion over Government policy on diesel.
“Consumers need urgent reassurance that the latest, low-emission diesel cars on sale will not face any bans, charges or other restrictions, anywhere in the UK.
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“We urge the Government to use the forthcoming autumn budget to restore stability to the market, encouraging the purchase of the latest low-emission vehicles, as fleet renewal is the fastest and most effective way of addressing air quality concerns.”
Demand for diesel cars continued to drop sharply – down 29.9% in October and 14.9% for the year so far.
Petrol models were up 2.7% last month, while alternatively-fuelled vehicles rose 36.9% to achieve a market share of 5.2%.
The Government recently announced plans to ban the sale of all conventional diesel and petrol cars by 2040 in a bid to meet European Union limits on harmful nitrogen dioxide pollution.
It is also considering funding measures to cut pollution with a tax on new diesel vehicles.
The Committee on Climate Change has said 60% of new cars and vans must be electric by 2030 to meet carbon targets cost-effectively.