The lift comes as manufacturers offer sweeteners such as hefty discounts or free on-road costs in the end-of-financial-year sales war.
May set a new record with official VFacts data showing 96,069 vehicles were sold, up 24.1 per cent (or 18,668) on the same month last year when supply was disrupted by the Japan tsunami and Thai floods.
So far this year sales are up 8.8 per cent (35,209 vehicles) to 435,288 with the Federal Chamber of Automotive Industries predicting a record year in excess of one million sales.
Western Australia and Queensland are the top-performing states this year up 13.3 per cent and 11.3 per cent, respectively.
The Toyota Hi-Lux ute was the top-selling car for the second month in a row with 3539 sold and 15,104 in the first five months of the year.
However, it trails both two small cars, the Mazda3 (17,889) and Toyota Corolla (15,222) so far this year, with the Holden Commodore in fourth (13,117).
Mazda3 last year ended Commodore's almost 20-year reign as the top-selling vehicle in Australia.
Legal secretary and law student Elise Neumann, 23, is one of the new breed of Mazda3 converts. She's a first-time Mazda buyer who shopped around extensively before buying a new Mazda3 Neo.
"I wanted a car that had a good reputation and that I knew would be reliable," she says. "Also looks were very important to me.
"In its price range - compared to other cars - it's better quality inside and out and much nicer to drive than any other car I test drove in that price range. "I'm absolutely in love with it."
Traditional large car favourites Commodore (2521 sales in May) and Ford Falcon (1008) have even been outsold by their smaller stablemates the Cruze (2860) and Focus (1667).
Toyota continues to top the sales, delivering 20,441 vehicles in May to relegate Holden to second on 9013 with Mazda in third on 8346.
Ford scored a rare success over Hyundai, moving into fourth for the month, as the Korean brand was nearly unseated by Nissan (trailing 6886 to 6883) after a strong bonus program in the Japanese brand's showrooms.
All companies are now in their end-of-financial-year selling programs with big bonuses for buyers, especially fleet customers.