Some car importers had sought permission from the state to export vehicles already bought into the country, media reports said.
Total new vehicle registrations, which include motor cycles, three wheelers and trucks, fell 45.3 percent to 24,478 while cheaper used vehicle sales fell at a faster 56.8 percent to 1,928.
Sri Lanka's state jacked up vehicle taxes suddenly by a midnight gazette literally while citizens were sleeping in April 2012, after central bank accommodated credit taken by state enterprises to manipulate energy tariffs forced a devaluation of the currency.
Taxes on ordinary citizens have been raised to prohibitive levels while elected rulers get tax free cars, and state workers get tax slashed cars.
In Sri Lanka taxes are not only imposed by midnight gazette without going to parliament violating a basic democratic principle of 'taxation by consent' but taxes are also arbitrarily raised between budgets, taking away the freedom of citizens to plan their lives.
Registrations of Maruti Alto a small Indian made car, Sri Lanka's best-selling model at one time fell 94 percent to just 45 units from 804 a year earlier.
Registrations of motor cycles fell 51 percent to 11,922 in September, and biggest fall seen in absolute terms was in the smallest motorcycles used by the least well off people.Motor cycles of engine capacity of 100 cubic centimeters or below fell by 7,541 units to 5,347.
The taxes by midnight gazette came just as female citizens were starting to buy small scooters, improving their mobility and freedom.
Analysts have pointed out that import duties, including nationalist taxes to protect big businessmen and producers close to the ruling elite work by hurting the poorest sections of citizenry most.
Luxury Mercedes, BMW and Audi cars meanwhile rose 7 percent to 88 units in September 2012 from a year earlier.