This month information and data giants Experian have reported that used car sales between the months of April and June in 2015 have hit their highest number since the recession began in 2008.

1.9 million vehicles changed hands in this year’s second quarter, a 7.3% increase from 2014, which saw only the 1.74 million used cars find a new owner. The North West region was at the head of the curve, with a 10.3% increase in sales versus 2014.

This boom parallels the current trend in the new car market, where sales in September 2015 saw a record high. The gap in price between new cars and used cars is smaller than it's ever been, meaning that price trends in the market are synchronising, rather than contrasting, as they were in previous years.

Ultimately, this is nothing but good news for the buyer at the current time, with their options for purchase more varied than ever before.

In particular, interest rates on financing are facilitating the boom by being at a very low point, leading to over 50% of all purchases in September 2015 being on finance. Industry experts are expecting these rates to rise in the coming 18 months, speculating that the influx of cars into car supermarkets is going to cause an excess of models without ownership in two years time.

In short: strike whilst the iron is hot. Right now, it’s burning.

Why The Market Is Booming

Whilst other, smaller, factors are also playing a part, the market boom is attributed to 3 main reasons:

1. The surge of car financing (and its low interest rates) 
2. The new 65 license plate. 
3. The end of the recession.

The end of the recession is fairly straightforward. Unemployment is down, more people have more money and, hence, more people can buy.

The surge in car financing, curiously, was something caused by the recession we’re now leaving. During 2008-13, as people found themselves strapped for cash, particularly large lump sums at any one given time, car dealers were forced to come up with new ways to sell cars, or the industry would collapse.

Financing and particularly PCP, which you’ll find more about below, was their solution. Offering cars on monthly payments, essentially creating a car hiring market. Since then, PCP has taken off like a house on fire, causing dealers to offer lower and lower interest rates on repayments to stay ahead of the competition.

Finally, the new 65 plate. A particular favourite of new car buyers, the shorter gap between new and used cars means that the ripples of the 65 in the new car market are reflected in the used car market. The 65 plate is new and alike a new iPhone or the latest fashion trends, that means some folks just have to have one.

The Age Of Our Cars

Interestingly, a strong trend has developed with regards to the age of the used cars we’re looking to buy, with sales of cars aged 9 years or upwards rising by 11%, whilst sales of those aged between 6 and 9 years dropped 5% over the same period.

This can likely be attributed to car financing and the new flexibility of options buyers are finding at their disposal. With PCP (Personal Contract Purchase), more and more buyers are trading in near-new cars (those within three years of age from the original purchase) for another, newer car of similar age.

This means that more cars bought at near-new age are being traded for other cars of the same age, causing any cars now aged 6 years+ that are traded back in after the PCP deal ends to be frozen out in favour of younger options, and it’s PCP which is allowing buyers to do this.

Meanwhile, as the cost of living continues to rise, other buyers are turning away from the idea of monthly repayments on finance to purchase cars outright, however doing so means buying a car of more mature age, hence the 11% rise in cars upwards of 9 years.

Conclusion

In much the same way it’s smart money to buy when the house market is low and sell when it’s high, now is the time to consider buying a used car.

With financing offering greater and grander options and flexibility to buyers than ever before, supply and demand means that the increased interest has increased the competition amongst the dealers to make the sale whilst interest is high.

This, in turn, causes lower interest rates and lower prices as companies compete to win your vote. However, as is the case with all markets, soon enough people will have stopped buying so highly, meaning demand will decrease and rates will rise.

That is projected to happen over the next 18 months. Therefore, the message is simple.

Buy now. The time is right.