Used car market sees first annual price growth in two year

The UK’s used car market has recorded its first year-on-year price increase in two years, signalling renewed momentum and resilience across the sector. According to Autotrader’s Retail Price Index, the average price of a used car reached £16,777 in August, representing a 0.4% annual rise and a 0.3% increase month-on-month. The data, based on around 800,000 daily price observations across the retail market, highlights growing consumer appetite and the underlying strength of demand.

After four months of flat year-on-year prices and a prolonged period of falling values following record highs during the pandemic, the market appears to be stabilising. This shift is underpinned by robust consumer interest, with Autotrader reporting a record-breaking 84.3 million cross-platform visits in August, up 2.1% compared with the same month last year.

Older vehicles are driving much of the recent growth, as demand in this segment continues to outpace the number of cars entering the market. Prices for five-to-ten-year-old cars rose by 1.4% year-on-year to reach an average of £13,619, while ten-to-fifteen-year-old vehicles saw a significant 6.5% jump to £6,580. By contrast, younger used cars are under increasing price pressure. Nearly new cars under twelve months old fell by 1.5% year-on-year, while one-to-three-year-old models dropped by 2%, reflecting a rise in supply that has outstripped demand.

Sales patterns also reveal diverging fortunes across the retail landscape. Independent dealers are benefiting from the stronger demand for older, more affordable vehicles, recording a 3.4% annual rise in used car transactions during August. Franchise retailers, however, saw a 3.1% decline, driven largely by supply challenges in the three-to-five-year-old vehicle segment, where stock fell by almost 9% year-on-year. This shortage stems from the estimated three million new cars that were not sold during the pandemic, a disruption that has continued to ripple through the market. Encouragingly, supply levels are expected to improve gradually from 2026 as these missing cohorts return to circulation.

Franchise businesses are also facing additional challenges from competitive new car finance offers and consumer incentives, particularly within the electric vehicle sector. Despite these pressures, there are signs of easing headwinds. Pre-registration activity – where cars are registered by dealers to meet sales targets – has softened considerably, with year-to-date volumes sitting 43% below 2019 levels, reducing downward pressure on nearly new stock pricing.

The used electric vehicle market continues to expand steadily. While government incentives such as the £650 million Electric Car Grant have yet to produce significant short-term effects on pricing, supply grew by 42.2% year-on-year in August, while demand increased by 31.3%. Although supply is outpacing demand, the market remains healthy, and prices are beginning to stabilise. The average price of a used EV stood at £25,025 in August, up 0.4% on the previous month but still 4.3% lower year-on-year – the smallest annual contraction since January 2023.

Marc Palmer, Head of Strategy and Insights at Autotrader, said the figures reflect the market’s underlying strength:

“As we’ve seen throughout 2025, the used car market continues to demonstrate real resilience, with strong consumer demand, swift sales, and robust market fundamentals which have led to the first year-on-year price growth in two years. This renewed momentum should inspire confidence among retailers as we move into the latter part of 2025.

“Although franchise businesses are currently feeling the squeeze, we expect that pressure to ease as the post-COVID shortfall continues to flow up through the parc. In this evolving landscape, having access to timely, granular data is crucial, to source, price, and market stock effectively and to stay ahead.”