In 2005 the size of the used car maker was estimated at £22 billion worth of deals each year, nearly 8 million individual transactions, with about 15% being sales of cars up to 3 years old, 25% cars 3-5 years old and the remaining 60% cars over 5 years old.
If you want to buy a car at say 2 years old and sell it at 4 years old depreciation will be your greatest motoring cost so buy a low depreciator and the lowest depreciators are the cars everyone wants, that have the right image, are the right colour and have the right equipment specification at the right price, both new and used. You'll pay the top price for that car at 2 years old but at 4 years old when you come to sell it you'll reap the benefits of your foresightedness with minimal depreciation.
If you want a real bargain buy exactly what all the others don't want. Many youngsters want to buy a cult car like a VW Beetle or 2 CV both cult cars with strong image associations which is why people buy them, they want to be a part of the group that owns that type of car, they are buying into a lifestyle. While this may be fairly overt with younger drivers older owners are just as image conscious they want just the right model for the supermarket or office car park or just to sit on the drive.
But all such strong image cars have prices set by their perceived desirability not by their real qualities. This is not just a trait off the young, it's practised in every executive car park in the land where the right boot badge denotes your perceived status.
If you're less bothered by image and more by price buy what isn't selling well, either the model that's just about to be replaced, the one that couldn't cut it in the executive car park, perhaps the eastern European import with the severe image problem that's still cheap, low tech and reliable motoring or the French executive cruiser that just never caught on and is now a bargain luxury car or the boring product of the 1970's strife torn British car industry that's still going strong 25 year later.
None of these cars have a good reputation, if it looks naff or it's unfashionable it's also cheap because it suffers from huge depreciation. This is not a problem if you will keep the car until it wears out, there's no actual loss involved.
Timing is also important, with the new plate numbers still arriving in August it's by far the busiest month of the year for dealers, new car registrations account for well over 25 % of total annual sales which have remained over the 2 million mark in each of the last 5 years.
Many dealers take good numbers of advance orders for the new plate cars, orders placed a mnoth or so before the now twice a year plate changes and these are the best months to seek out your nearly new car, either a pre-registered "old" plate car or a demonstrator, or buying a trade-in used car at a time when dealers forecourts are stuffed with more used cars than they want or can afford money or space to keep.
Car makers work hard each year to stimulate sales with many new cars appearing in the local dealers and some very affordable deals and some dealers now extend those offers to move their late model trade-in stock twice a year, sometimes with tempting finance deals, cheap insurance, and other incentives. If they can't sell them to you they have to go to the auctions so they are usually keen to do a deal.
Other good times of the year to buy used cars are November, December and January when the trade is at it's quietest and dealers are keen to sell anything. Don't go looking in February, March, April and May because that's when everybody else does, with the Spring the dormant market awakes, prices firm up accordingly and it becomes a sellers market.
Don't be afraid of high mileage, most cars these days are good for 150, 000 miles with little other than regular servicing and minor repairs needed, many diesels will easily go 200, 000, if looked after high mileage cars can be a good buy... at the right price.
The thing that kills engines is stopping and starting which is why taxis take a real hammering but high mileage fleet cars are generally in better shape. Usually they spend much of their time on motorways where engines and gearboxes are operating at their optimum temperature, are well lubricated and very unstressed. Fleet cars are usually much better and more regualrly serviced than private.
If you buy a 2 year old with 30, 000 miles on it and then only put 10, 000 on in the next 2 years you end up with an average mileage car that may actually have recouped some of it's earlier lost value when you come to sell it.
Generally larger car's values fall fastest so if you're minded toward a big car and don't mind the higher running costs you might get a bargain especially at auction just after a budget when the price of petrol has just gone up again.
Turbo diesels and diesels are no longer fetching premium prices used or new as they were a year or so ago.
Equally damaging has been the erosion of petrol to diesel price differentials which a few years ago, when diesels were more favourably regarded, was substantial in favour of oil burners but is now minimal as budgets have closed the gap.