– 2025: largest new and used car market since 2019
– 2026: used car sales expected to grow to over 8.2m
– Confidence remains robust despite economy fears
– 2025: largest new and used car market since 2019
– 2026: used car sales expected to grow to over 8.2m
– Confidence remains robust despite economy fears
The UK car market is expected to end 2025 with around 9.8 million total transactions, delivering the largest combined new and used market so far this decade, according to Autotrader.
Despite ongoing sourcing challenges and a choice of 72 brands on offer, the online marketplace believes this robust recovery will prevail for the foreseeable future.
After five years of volatility, Autotrader expects the retail market to return to its pre-pandemic size in 2026, with a forecast 10.2 million transactions – matching the heights last seen in 2019.
The upbeat outlook is underpinned by the continued strength of the used car sector, which is predicted to grow a further 3% year on year in 2026 to reach around 8.2 million sales, continuing its recovery since 2022.
By contrast, the new car market – facing fierce competition and regulatory pressure – is expected to remain relatively flat, with modest growth of 1% and total registrations of 2.035 million.
Autotrader’s forecast comes despite expectations that 2025 will be marked by stable but elevated inflation and interest rates.
Pointing to strong consumer confidence and intent as key drivers of resilience, the business said it had registered a record 982.3 million visits over the past 12 months, 14.8 million more than the previous period and equivalent to nearly 2,000 visits a minute.
It reported that nine in 10 car buyers said they feel as confident, or more confident, about being able to afford their next vehicle as they did last year, while nearly three-quarters plan to purchase a car in the next six months.
Autotrader said this strong intent – supported by the fact that nine in 10 consumers view motoring spend as a necessity – is insulating the used car sector from wider macroeconomic uncertainty.
The new car market, however, remains more exposed to economic headwinds. Even so, Autotrader believes a combination of increased competition, sharper pricing and an anticipated softening in interest rates could help stimulate new car demand, particularly given the high proportion of new car buyers who use finance.
Three themes
Autotrader identifies three structural themes that it says will define how the industry approaches 2026: used car stock, electric vehicles and intensifying brand competition.
The battle for used stock, it argues, can be traced back to around two million new cars that were not sold during the pandemic, the impact of which is still working its way through the market.
Its data shows independent retailers and car supermarkets have grown used sales faster in 2025 than their franchised counterparts, with independents up 4.3% year on year and supermarkets up 5.7%, compared with a 0.7% decline for franchised dealers.
Initially, the shortage of younger vehicles hit franchise businesses hardest. However, as the supply imbalance moves into the core of the used market, independents are now starting to feel the effects for the first time.
Although 2026 is expected to bring an increase in three-year-old vehicles as a result of higher registrations in 2023, Autotrader says the real pressure is moving into older age bands.
It estimates there will be 1.6 million fewer three-to five-year-old cars in the market next year than in 2019, while volumes of five-to seven-year-old models are set to fall by 17% year on year.
That shortfall is expected to affect retailers across the board and could continue to be felt for several years.
Autotrader argues that while the supply gap will challenge all segments, it will also create opportunities for retailers that can diversify sourcing, use data more intelligently and focus on customer engagement to make the most of the changing age profile of the parc.
Going electric
The second major theme is the next phase of the electric vehicle transition. Autotrader says the combination of the Electric Car Grant (ECG), a growing variety of EV models and a broader spread of price points is proving highly effective in lifting demand, with EV consideration on its platform now back in line with previous highs.
By fuelling price competition between brands, the ECG has helped narrow the gap between EVs and internal combustion engine models, with ECG-eligible cars – or those with equivalent manufacturer offers – now dominating new EV enquiries on Autotrader.
EVs have accounted for around 25% of new car sales over the past quarter, three percentage points ahead of the year-to-date average. While that still falls short of current Zero Emission Vehicle (ZEV) mandate targets, Autotrader says it underlines the potential of EVs to provide a major growth pathway for the new car market, even if there are still hurdles to overcome.
In the used market, electric demand continues to outstrip supply, helping to stabilise prices and resulting in used EVs selling faster than any other fuel type. Autotrader reports a 30% year-on-year rise in demand for used EVs on its platform, with the 3-5-year-old age band up 37%. Independent retailers are selling used EVs in an average of 20 days, reinforcing the segment’s importance as a growth engine.
The third theme Autotrader highlights is the increasingly crowded brand landscape, particularly in EVs. There are currently 72 brands competing for UK buyers’ attention – 27 more than in 2019 – with that figure expected to reach around 80 by the end of 2026.
At the same time, customer loyalty is weakening, especially in the electric sector, where only one in five new EV owners opt to repurchase the same brand.
Autotrader argues that despite the tougher, more fragmented environment, there is still considerable scope for growth in 2026 – but only for brands and retailers willing to adopt a highly conquest-driven approach, invest in slick digital journeys and communicate a clear value proposition that resonates with buyers increasingly open to trying something new.
Commenting on the outlook, Autotrader chief commercial officer Ian Plummer said: “2026 is set for growth, but the underlying narrative is one of structural change and intense competition. The fact that the UK’s combined new and used car market is on track to finally return to the same size as 2019 is a clear signal of the resilience and the fundamental necessity of car ownership for consumers.
“However, this is not easy growth. Success in 2026 will be defined by agility, the ability to adopt a conquest mindset, and leveraging data to accurately target and convert customers in both the increasingly fragmented new car market and an ever more competitive used EV market.
“Just as importantly, proactive action is essential: retailers and brands must take tangible steps to optimise sourcing and retention – not only of customers but also of vehicles — maximising the lifetime value of both. Those who prioritise these areas and respond actively to the evolving challenges will be best positioned to thrive in the year ahead.”
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AM deputy editor Aimée Turner has been a specialist B2B editor and journalist covering the international transportation sector for more than 20 years.
She has specialised in the significant safety, regulatory, and environmental issues that impact advanced technology businesses in the pursuit of more efficient, safer and sustainable transportation modes.
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