David Bruce, director of AA Cars points out that for every new car sold, at least three used cars change hands over subsequent weeks.
“Between September and November we’re expecting dealers to be busier than they have been for some years,” he says.
According to the Society of Motor Manufacturers and Traders (SMMT), new car sales are expected to pass 2.2m by the end of 2013 – the highest since 2008 –and 8.4% ahead of 2012. During September around 424,000 ‘63’-plate cars are expected to be sold.
“As September approached, dealer stocks have been run down in anticipation of the September car sales bonanza,” Mr Bruce points out. “There will be a large influx of used cars being taken in part-exchange and, over the next three months, the used car market could see over 1.25 million cars changing hands.”
With growing optimism as the UK emerges from recession, Mr Bruce says that people are beginning to change their cars more frequently. “During the recession, the number of people planning to change their car within two years had fallen to a record low.
“Dealers are more optimistic than I’ve seen for a long time,” he adds. “With a lot of used cars coming on to the market there will be some deals to be done for the canny buyer.”
Used cars can now be bought with confidence through AA Cars, which is a new car sales platform that includes a complimentary 26-point car history check, helping to ensure that buyers don’t ‘buy a lemon’.
Saving wins over borrowing to pay for a car
According to the AA Financial Services Car Purchase Index, which tracks the car buying intentions of AA members, just over half of buyers (52%) expect to pay for their new car with savings.
Mark Huggins, director of AA Financial Services points out that with continuing low interest rates, many people are cashing in savings and are avoiding taking on more credit.
“Being a cash buyer could give you an edge in terms of bargaining for a discount. With a glut of used cars on the market many dealers will be keen to see stock move quickly and may be ready to do a deal.”
However, not everyone has the luxury of spare savings to spend on a car and, according to the AA’s research; nearly a quarter of buyers (24%) will opt for finance whether from a dealer through a personal loan.
Mr Huggins says it’s worth comparing car dealer finance with personal loans. “Shopping around could get you a good interest rate for a personal loan, which then puts you in the position of a cash buyer,” he says.
“Another relatively new option is to use a fixed rate money transfer credit card, which enables the card holder to transfer cash into their bank account and pay it back at a fixed rate for as long as they wish to take.
“This can be useful to top up available cash to perhaps go for a younger or improved specification car.”