New figures in the latest BCA Used Car Market Report indicate used car sales increased by 6.4% to reach 7.1 million units last year as they outstripped new car sales.
The report shows the total used car market value peaked at £38.1 billion, £5.8 billion higher than the new car market value.
Sales of younger used cars enjoyed a strong 2012 after three years of dropping volumes, going up by 18.6% to 762,000.
The report said lower inflation and fuel costs, increasing employment and an improving economy heartened car buyers last year.
However, the average age of cars hit a 30-year high at 7.59 years, while there was a 5% increase in households without a vehicle, with the figure up at 12% in London.
BCA Used Car Market Report editor Tim Naylor said: "Overall, there is a little more confidence expressed by motorists in terms of the economic climate, the products they are buying and the service they are receiving.
"With improving economic indicators, we could see more people looking to replace their used car with a better used car. The number of motorists saying they 'certainly' or 'quite likely' will buy a car in the next 12 months rose from 10% last year to 14% this year (a 40% rise in real terms)."
Copyright Press Association 2013