Thinking of buying a used car? Now is a good time to do it, writes Jonathan Crouch.

After almost a year of falling residual values, the used car market is now finally beginning to improve.

Independent reports suggest that this is going to be a good year to buy a car because you will get it at an exceptional price and when you buy it, the risk of its residual value continuing to fall is much less than it was 18 months ago. Today's new cars have been revolutionised over the past decade by hi-tech design and manufacturing processes. This is good news, not just for new car buyers, but it is great for those interested in buying used cars.

The Used Car Market

In the trade, used cars are usually priced 'nearly new' or 'used'. Nearly new cars are those up to one year old, while used cars fall into two categories – one to three years old, and over three years old. Nearly new cars often have very low mileages and have thousands of pounds off the new list price, so are often outstanding value.

Main dealers generally offer a good supply of carefully prepared late model low mileage used cars and demonstrators with genuine mileage and services histories. Efficient after-sales services and warranties also ensure peace of mind as do mechanical breakdown, insurance services, hire-purchase facilities and servicing back-up.

Before buying a used car

Before buying any car, and especially a used car, it is important to check its condition thoroughly and test it out on the road. If the car is more than three years old, check it has a current MOT certificate stating the vehicle complies with certain criteria at a given date.

A full service history is also very important to ensure the vehicle has been properly looked after, and check the mileage is warranted in writing to avoid any potential problems in the future.

Paying for the car

Before entering into any finance agreement, accepting any warranty or indeed accepting a used car, make sure you read and understand all the documentation before signing them or handing over any cash. If the dealer has arranged the finance agreement whereby you purchase the used vehicle and he refuses to deal with a subsequent complaint, your claim for compensation will be against the finance company, which in turn will claim from the dealer. However, do not stop your repayments.

Any problems

Taking delivery of a 'new' car, even if it is pre-owned, is great fun and the best way to start the year. Don't plan your next journey until you have visited your local garage or main dealer. Finally, the DVLA strongly recommends that anyone considering purchasing a used car privately should take following practical steps to limit the chances of being sold a stolen vehicle:

Always have sight of the registration document V5 prior to purchasing a used vehicle.