Car sales jumped by more than a quarter at the end of last year — a sign that the economy is on the mend, according to vehicle sellers.

Glen Smith, head of Auto Solutions, said: “There is a recovery — there are a lot of cars coming to the end of their life cycle and we have also had some new arrivals of guest workers to Bermuda buying cars, which is encouraging.”

Mr Smith added that the used car market was boosted after the recession hit the Island and expatriate workers left — which cut into new vehicle sales.

But he said that many of those vehicles were now approaching the end of their useful lives and were being replaced.

And Mr Smith added that, since Auto Solutions took over the nine marque business from HWP in May last year, a total of 31 vehicles had been sold to new arrivals up to the end of 2013.

He said: “January is looking very promising too. There is confidence — we had a 54 percent market share in November, but that does go up and down.

“December was off because people don’t spend a lot on cars at Christmas.”

Mr Smith was speaking after the November Retail Sales Index (RSI) revealed that sales at motor vehicle stores had increased year on year for the third November in a row, after a steady decline since 2008. November was also the third successive month to see a year-over-year increase in vehicle sales.

The RSI said: “Sales of motor vehicles jumped 27.6 percent year-on-year in November 2013. The volume of both cars and motorcycles sold during the month increased.”

Mr Smith, who is also an OBA MP, added there was also a trend towards people buying smaller cars — although family-sized SUVs continued to sell well.

He said: “A car comes to the end of its life cycle, people may have an SUV, but they don’t need that any more because their family has moved on. But we have seen people downsizing because smaller cars are less expensive to buy, license and to run. We are, however, still selling SUVs as well. It’s a combination of everything, right across the board.”

Auto Solutions includes Honda, Hyundai, VW, Daihatsu, Suzuki and Nissan among its line-up.

Mr Smith said: “I would say our Hyundai vehicles are our best sellers. The Koreans have done extremely well. I’d say the Hyundai Accent is the best selling Hyundai — it’s a mid-size, four door car.”

Sharon Davis, co-owner of Rayclan, which sells Chevrolet cars, including the popular supermini Spark model, said: “The overall outlook is certainly better than it was in 2011 and 2012. We can look forward with optimism.”

But she added: “At one point, we were selling 40 cars a month — we’re certainly not doing that now. Some months, we sell three or four.”

Ms Davis added that there was a marked divide between the bigger guns in the business and smaller car showrooms.

She said: “For large companies, their increases will be a lot bigger than those who only have one make. But we sell the small Chevy Spark, which is an inexpensive car which we do well with.”

Ms Davis added she had also noticed a trend to downsizing, particularly among older people.

She said: “People with families need larger cars. There will always be the need for family cars, but as people get older or when their families grow up and are gone, they look at smaller cars. And a lot of single parent families buy smaller cars as well.”

Ms Davis added that Rayclan also sells truck and car parts, both new and used, for other makes, which had proved to be “very lucrative for us”.