Used car market enters 2026 on strong footing as 2025 sales rise 2%

The UK’s used car market has entered 2026 with renewed optimism, following a resilient and highly dynamic performance throughout 2025. Fresh figures from Autotrader show the year closed with an estimated 7.8 million used car transactions, buoyed by a 2% rise in retail sales on the platform compared with 2024. The growth was supported by strong consumer demand and stabilising retail prices.

December’s performance capped the year on a high, delivering a c.4% year-on-year uplift in sales volumes. But behind the headline numbers, Autotrader’s data reveals a market shaped by pronounced supply challenges. A shortage of around 1.8 million 3–5-year-old cars compared with 2019 tightened competition for stock and shifted the market balance. Independent retailers expanded their share of 1–5-year-old vehicles, while franchised retailers saw their share slip from 70% to 68%, leaving franchised sales broadly flat at -0.5%, versus 4% average growth for independents.

Consumer confidence fuels outlook for 2026

Despite supply headwinds, demand remained exceptionally strong through 2025. Visits to Autotrader in Q4 matched the previous year’s high, averaging 32 site visits per second, contributing to nearly 1 billion total visits across the year.

Consumer confidence also received a post-Budget boost. GfK’s overall Consumer Confidence Index rose by two points, while the Major Purchase Index climbed five points year-on-year. Autotrader’s own research indicates more than 80% of buyers feel at least as confident in affording their next car as they did a year ago.

These indicators underpin Autotrader’s forecast of continued growth in 2026, with used car sales expected to rise a further 3% year-on-year, taking the market to approximately 8 million transactions.

“The used car market has shown remarkable stability throughout 2025. Ending the year with sales volumes up and prices holding firm provides a very positive foundation for the months ahead. While we recognise that many retailers face ongoing challenges with supply and margin pressure, the fundamental demand for car ownership remains the bedrock of this market.”

Retail prices hold steady

Autotrader’s Retail Price Index shows average used car prices fell just 0.2% over 2025. December’s average price of £17,018 was flat year-on-year, though prices eased 1% month-on-month, reflecting normal seasonal patterns.

Price strength was concentrated in older vehicles, where demand continues to exceed supply. The average price of a 10–15-year-old car rose 8.5% year-on-year in December. Meanwhile, nearly-new models (under 12 months old) saw prices decline by 2.7%, averaging £31,395.

Fuel type trends also diverged. Petrol and diesel vehicles outperformed the market, rising 1.5% and 2.5% respectively year-on-year in December. Used electric vehicles, however, recorded a 7.4% decline.

Used EVs: fastest-selling and highest-growth segment

Despite softer pricing at the younger end of the EV market, 2025 was a landmark year for used electric vehicles. Demand surged 28% year-on-year on Autotrader, with EVs accounting for more than one in seven enquiries on cars under five years old. Used EV sales soared by 52%.

Electric cars are also turning stock more quickly than petrol or diesel models. In December, the average used EV sold in 30 days – five days faster than the market average. For 3–5-year-old EVs, where prices have now aligned with petrol equivalents, the time-to-sell dropped to just 25 days.

Some retailers have adopted EVs as a strategic pricing lever, contributing to competitive pricing on younger, returning stock.

Palmer added: “We’re seeing a maturing EV segment and a consumer base that remains highly engaged attracted by a brilliant ownership experience, which includes annual savings of up to £1,500 in ownership costs. With research behaviour remaining strong throughout December, we expect a significant volume of these researchers to convert into buyers in January, as is typical for the start of a new year.”