New registrations for all cars dipped 4.1 percent last month on a yearly basis to 161,064 vehicles as demand also continued to slide for high-polluting diesel vehicles, the Society of Motor Manufacturers and Traders (SMMT) said in a statement.
But sales of plug-in hybrids slumped 34 percent to 1,992 last month from 2,929 a year earlier.
The SMMT added that the sharp drop was "evidence of the consequences of prematurely removing upfront purchase incentives before the market is ready" for cars which can run on both petrol and electricity.
Britain's Conservative government last year cut its plug-in hybrid grant to 3,500 ($4,600, 4,100 euros) per vehicle from 4,500.
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