Used car market gains momentum as robust demand drives positive outlook

The used car market is showing clear signs of renewed strength and resilience, according to fresh data from AutoTrader, signalling a positive trajectory as the sector heads into the second half of the year.

Buoyed by robust consumer confidence, stable prices, and fast turnover, July marked a significant turning point, with both supply and demand dynamics aligning to create a healthy and competitive market environment.

Based on around 800,000 retail market pricing observations, the average price of a used car in July was £16,786 – flat on both a month-on-month and year-on-year basis. This marks the fourth consecutive month of YoY price stability, following 19 months of decline, and highlights the sector’s return to a more balanced footing.

AutoTrader’s Market Health metric also reflected this strength, posting its first upturn since January. The metric rose 1% YoY, building on an already solid 8% growth in July 2024. This improvement has been driven by a slowing supply growth rate of +1.1% YoY, which combined with 2% growth in demand, has provided a fertile landscape for recovery.

A key sign of this momentum is the quickening pace of vehicle turnover. In July, used cars were sold on average every 29 days, which is one day faster than July 2024, and three days quicker than July 2023 – a clear indicator of rising consumer appetite.

AutoTrader’s latest consumer research supports this trend. Nearly 44% of 1,000 respondents surveyed in July said they felt "much more" confident about affording their next car compared with last year. Additionally, in a separate study of over 2,000 people, approximately 70% said they intend to purchase a vehicle within the next six months.

This growing intent is mirrored in digital engagement: AutoTrader recorded around 85 million cross-platform visits in July, up 5.7% YoY and marking its biggest July audience on record. This follows similar record-breaking numbers in both May and June, reinforcing the market’s strong forward momentum.

This confidence is translating directly into sales. AutoTrader data shows the used car market grew 3.3% YoY in July. However, performance differed between retailer types. Independent retailers saw a 6.1% increase in sales, while franchise retailers remained flat at 0.1%.

The divergence is partly due to vehicle availability. The supply of 3–5-year-old cars, a key segment for franchised dealers, has dropped sharply since the pandemic. Supply chain disruptions that persisted until mid-2023 have taken a lasting toll, with volume falling from 4.8 million in 2019 to a projected 2.9 million by the end of 2025.

In contrast, independent retailers have been less exposed to these supply shortages. They’ve benefitted from increased demand for older, more affordable vehicles, with interest in 5–10-year-old cars up 3% YoY, and demand for cars over 10 years old climbing 8.6%.

Commenting on the data, Marc Palmer, head of strategy and insights at AutoTrader, said: “The combination of swift sales, increasing site visits, and stable pricing underscores a dynamic and resilient sector, which should provide confidence for retailers as the market heads into the remainder of 2025.

“However, there remain significant nuances and challenges in the market around supply, which is making the job of finding profitable cars increasingly more competitive. Using the data and insights available to help source and price new stock has never been more important, particularly where traditional stock profiles have been impacted.”

One of the most notable growth areas continues to be used electric vehicles (EVs). Supply surged 42.4% YoY in July, up from 38.1% in June, while demand grew 37.8%, accelerating from 28.6% the previous month. With supply only just outpacing demand, used EV prices are stabilising.

The average price of a used EV was £24,727 in July, up 0.4% month-on-month - making EVs the only fuel type to see price growth in the month. Although EV prices remain down 6% YoY, this marks an improvement from the -7.6% decline recorded in June, and is the lowest level of annual contraction since January 2023.

In terms of turnover, used EVs were among the fastest-selling fuel types, taking just 28 days to sell - on a par with petrol vehicles. That’s a sharp improvement from the 32 days in June, when EVs were the slowest-selling segment.

This acceleration is partly driven by consumer reaction to the government’s new £650 million Electric Car Grant. Following its announcement, AutoTrader recorded a 107% week-on-week spike in interest for EVs priced under £37,000, suggesting that demand in the used EV market could benefit from a lasting halo effect.