In total, 426,170 new cars were registered last month.
Demand from private buyers dropped 8.8% while business and fleet buyers too declined by 5.2% and 10.1% respectively.
The SMMT blamed the decline uncertainty due to Brexit.
Mike Hawes, SMMT chief executive, said: "Business and political uncertainty is reducing buyer confidence, with consumers and businesses more likely to delay big ticket purchases."
The drop in car sales, Hawes noted, will "cause considerably concern" as September is a barometer of health fo the UK new car market.
Another reason for the drop in car sales, he continued, is the confusion surrounding air qulity plans.
Diesel cars have long been regarded as clearner than petrol cars in Europe. However, recent research has shown that diesel cars may be worse than petrol cars in terms of carbon emissions.
Furthermore, the UK government has announced plans to ban the sales of all new petrol and diesel cars and vans from 2040.
This has led to sales in diesel cars plunging by 21.7%.
"The confusion surrounding air quality plans has not helped, but consumers should be reassured that all the new diesel and petrol models on the market will not face any bans or additional charges," Hawes said. "Manufacturers’ scrappage schemes are proving popular and such schemes are to be encouraged given fleet renewal is the best way to address environmental issues in our towns and cities."
In the past month the most popular car was the Nissan Quashqai which sold 13,499 vehicles. But the Ford Fiesta leads in terms of vehicles sold this year to date with 75,814 cars sold.