According to data from the Society of Motor Manufacturers and Traders (SMMT), used car transactions rose by 1.7 percent year-over-year in the second quarter, marking the strongest Q2 since 2021. Overall, sales have grown for ten consecutive quarters, bringing the market within 1 percent of pre-pandemic levels during the first half of 2025. This sustained momentum defies earlier fears of a market slump driven by economic uncertainty and changing buyer behaviour.
Trade prices, however, tell a slightly different story. While retail prices for used cars have largely stabilised around £16,800 - £17,000 in recent months, trade prices at auctions have dipped, reflecting an adjustment after the inflated prices seen during pandemic-era shortages. This dip signals an easing of the previous supply squeeze but also indicates growing pressure on dealership margins, especially for nearly-new vehicles.
Despite the price softening at trade level, consumer confidence remains high. Surveys reveal that nearly 90 percent of prospective buyers feel as confident or more confident than last year about purchasing a vehicle. This confidence fuels steady demand, particularly for petrol, diesel, and hybrid cars aged three to five years — a sweet spot where purchasers balance affordability with technology and reliability.
The battle for stock has shifted from franchise dealerships towards independent retailers and supermarkets, who have seen used car sales grow by 4.3 and 5.7 percent respectively in 2025. Their ability to navigate shifts in supply and cater to evolving consumer preferences provides them an edge in a competitive market.
Looking ahead, analysts forecast the UK will record roughly 7.6 million used car sales in 2025, flat compared to last year but healthy by historical standards. Continued economic stability, falling inflation, and easing interest rates are expected to bolster both retail and fleet activity, potentially driving growth into 2026.
This environment also supports the increasing share of electric vehicles on the used market. Battery electric vehicles (BEVs) are projected to rise to 5 percent of the used parc this year, with forecasts suggesting a doubling by 2028 as secondhand EV affordability improves.
The resilience of the UK used car market amid price pressures highlights its essential role as an affordable alternative for drivers wary of new car prices and ongoing supply chain challenges. For buyers willing to shop smart, 2025 offers opportunity—a market balanced between cautious optimism and sustained demand.
For dealers, the challenge lies in managing stock carefully and protecting margins while responding to shifting consumer tastes. As the market continues to evolve, those nimble enough to adapt will thrive even as trade prices find their new normal.
