The 2013 BCA Report by British Car Auctions valued the used car market a £38.1 billion in 2012, putting it £5.8 billion ahead of the new car market over the same period.

In particular sales of younger used cars (0-2 years) increased significantly, rising by 18.6% to 762,000 and reversing a three year trend of falling volumes in this age sector.

The report, authored by Professor Peter Cooke of the Centre for Automotive Management, University of Buckingham Business School, says that lower inflation, lower fuel costs, rising employment and a more stable economy helped restore car buyers' confidence somewhat in 2012.

However, the long-term impact of the fall in new car sales during and immediately following the recession can still be seen, with the average age of vehicles on UK roads reaching a 30 year high at 7.59 years. There has also been a 5% rise in households without a car, with London recording a 12% increase in ‘no-car’ families.

In terms of sales, dealers continue to dominate the used car market, accounting for 57.2% of all used cars sold representing a massive 74.4% of the total market value.

Tim Naylor, editor of the annual BCA Used Car Market Report commented “Overall our Used Car Market Report for 2013 suggests that the UK may be turning a corner in consumer confidence as lower inflation, a slowdown in fuel price rises, improving employment prospects and a more stable economy seem to be helping to restore car buyers' confidence.

"In particular, low and 0% interest offers could be creating fresh demand for new cars, with 40% of motorists who responded to our research saying that they were considering buying new rather than used for their next car. This is good news for the market as a whole as new cars create used car stock in future.”