A total of 169,678 new cars were registered in the UK, up 2.9% compared with January 2015.
That is the highest sales figure for January since 2005, according to the Society of Motor Manufacturers and Traders (SMMT).
Last year saw the highest number of cars ever sold in the UK -, up 6.3% on 2014 to an unprecedented 2.6 million.
SMMT chief executive Mike Hawes said: "January's solid performance puts the new car sector in a good position to start the year.
"Providing consumer confidence remains strong, we expect a more stable 12 months ahead, broadly similar to 2015 which was, of course, a record year."
Volkswagen car sales fell in the wake of the diesel emissions scandal - down 13.9% compared with January 2015.
Other VW brands also struggled, with Seat registrations falling by 24.6% and Skoda down by 2.4%.
But there was better news for Audi, which experienced a 1.4% year-on-year rise last month.