The September tally set a record for vehicle sales, according to the Federal Chamber of Automotive Industries (FCAI), and was the fourth of the past five months to reach record sales.
Electric vehicles also increased in popularity in September, representing eight per cent of all sales and making up ground on a drop during August.
FCAI chief executive Tony Weber said the latest figures showed Australians were on track for a record year for cars, with almost 900,000 vehicles sold in nine months.
Mr Weber said better supply had helped buyers, as well as a competitive market with a wide range of models.
"Our advice is that the supply of vehicles into Australia, including electric vehicles, continues to improve," he said.
"The record result shows that Australian car buyers value a broad choice of vehicles in a range of price brackets that suit the family or business budget."
NSW recorded the highest increase in new car sales with 24 per cent, followed by Western Australia with 22 per cent, Tasmania with 21 per cent, and the ACT with 20 per cent.
But SUVs outperformed other vehicle types across the country, with more than 64,000 sold during September, making up 57 per cent of the automotive market.
The sales figure represented a rise of 29 per cent on September last year, or an extra 14,409 SUVs sold.
Despite their popularity, Toyota's HiLux ute claimed the title of most popular vehicle model in September followed by the Ford Ranger ute, while Tesla's Model Y electric SUV raced into third place.
Electric car sales also rose last month, making up eight per cent of all new vehicles with 8821 sold - 1574 more than in September last year.
The data showed sales of electric vehicles in 2023 had quadrupled compared to 2022, with more than 65,000 electric cars sold between January and September compared to fewer than 22,000 the year before.
Sales of all lower emission vehicles, including hybrid, plug-in electric hybrid and battery electric cars, represented 18.3 per cent of new car sales in September.
The data comes less than three weeks after NSW revealed plans to scrap its rebate on electric vehicles on January 1 next year, and after Victoria ended its scheme in June, almost a year earlier than planned.
The federal government is expected to introduce a draft fuel-efficiency standard in the coming months to encourage automotive brands to bring more low-emission vehicles into the country - a move that could change the type of vehicles sold in Australia.
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