UK car market set to finally return to pre-pandemic scale as 10.2m transactions predicted for 2026

Total UK car market set to reach 9.8m transactions in 2025, marking largest combined new and used market since 2019; predicted to accelerate to 10.2m in 2026, matching 2019 scale.

Used car sales are expected to grow 3% to over 8.2m next year, whilst new registrations forecast for a more modest 1% growth to 2.035m registrations.

Success in 2026 will be defined by retailers' ability to navigate key challenges, including persistent sourcing issues, and an increasingly competitive brand landscape.

Car buying confidence remains robust, as Autotrader sees c.2.7m visits every day in 2025.i

1st December 2025 – London: According to Autotrader analysis, the UK car market is expected to close 2025 with an estimated 9.8m total transactionsii, delivering the largest combined new and used market since 2019. And whilst retailers will need to navigate ongoing sourcing challenges, weakening brand loyalty, and a rapidly changing brand landscape, this robust recovery is set to continue next year. After five years of unprecedented volatility, Autotrader expects the retail market to return to its pre-pandemic size in 2026, with a forecast of 10.2m transactions – matching the heights last seen in 2019.

Autotrader’s confident outlook is fuelled by the continued strength and resilience of the used car sector, which it predicts will grow a further 3% year-on-year (YoY) to reach circa 8.2m sales in 2026, continuing its progressive recovery since 2022. In contrast, the new car market, which faces a combination of fierce competition and regulatory pressures, is expected to be relatively flat with modest growth of just 1%, achieving a total of 2.035m registrations.

Despite a 2025 marked by stable but elevated inflation and interest rates iii, consumer confidence has remained resilient. Autotrader’s data supports this, with a record 982.3m visits to its platform over the last 12 monthsiv (14.8m more than the previous period and equating to nearly 2,000 visits every minute). What’s more 91%v of car buyers remain as confident, or more confident, in their ability to afford their next vehicle as they did last year, with 74%vi looking to purchase a car in the next six months.

It’s this same strong foundation of consumer intent—nine in 10vii view motoring spend as a necessity —that is insulating the used car sector. In contrast, the new car market is more vulnerable to today’s uncertain macroeconomic fluctuations, albeit a combination of increased competition and price competitiveness, aided by the forecasted softening in interest rates could stimulate new car interest given the preponderance of new car buyers who finance their purchases.

Supply challenges and the retailer battleground

According to Autotrader’s analysis three critical, structural themes will set the parameters for how the industry approaches 2026: used car stock, electric vehicles and new brand competition.

The battle for used car stock has been fuelled by the c.2m new cars not sold during the pandemic, the impact of which continues to flow through the market. As reflected in Autotrader’s data, which shows independent retailers (+4.3% YoY) and supermarkets (+5.7%) have grown used car sales faster in 2025 than their franchise counterparts (-0.7%), the shortfall in what was initially just younger stock primarily affected franchise businesses. However, the balance is now shifting to the core of the used car market, meaning independent retailers are starting to feel the impact for the first time.

With 2026 set to bring a rise in 3-year-old vehicles due to a larger volume of registrations in 2023, the real challenge is moving towards older segments. Autotrader’s analysis indicates there will be 1.6mviii fewer 3-5-year-old cars in the market next year vs. 2019 while the volume of 5–7-year-old models will see a 17% YoY drop. This shortfall is expected to impact a broad swathe of retailers across the UK, and its effects are likely to be felt for several years to come.

While the supply gap is set to challenge all retailer segments in 2026, it creates significant opportunities for those able to adapt quickly. Retailers who diversify their sourcing strategies, leverage data-driven insights, and focus on customer engagement will be best placed to benefit from the evolving age mix of the parc.

EV transition: opportunity for growth and conquest

Another key theme of 2026 is the new phase of the electric vehicle (EV) transition. Autotrader’s analysis shows that the compelling combination of the Electric Car Grant (ECG), and the growing array of models and price points is proving to be highly effective, helping to return EV consideration in line with previous highs on its platform. Having fuelled price competition among brands, the ECG has helped to drive down the EV-ICE barrier, resulting in ECG-eligible models (or models with grant equivalent offers) now dominating new EV enquiries on Autotrader.

Reflecting the surge in interest, EV sales over the last quarter have represented around 25% of the total new car market (up 3% on the YTD average). Although it falls short of ZEV mandate targets, it’s clear EVs represent a significant pathway for new car growth, albeit with potential bumps and challenges to navigate on the way.

In the used EV market, demand remains greater than supply, which as well as helping to stabilise prices, is resulting in used electric models selling fasterix than any other fuel type. This surge in used electric demand (+30% YoYx on Autotrader), particularly within the more affordable 3-5-year-old segment (+37% YoY) is proving to be a major growth engine for all retailers, in fact independent retailers are selling their EVs in an average of 20 days. Clearly, for retailers and brands willing to adapt and innovate in 2026, the accelerating momentum in both the new and used EV markets offers a significant growth opportunity.

Fierce competition in the new car market

The third key theme for 2026 is the fast-changing brand landscape. With 72 brands currently competing for attention – a whopping 27 more than in 2019, with around 80 expected by the end of 2026 - car buyers have more choice than ever. This rapidly shifting and hyper-competitive landscape is exacerbated by low customer loyalty, particularly in the EV sector, where only 1 in 5xi new electric owners are choosing to repurchase the same brand.

With this increased competition, combined also with the regulatory pressures in the market, the market can still offer considerable prospects for growth in 2026. The key will be how brands and retailers can adopt a highly conquest-driven approach, a slick digital presence and a clear value proposition to win over customers who are increasingly receptive to new brands.

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.”