10:42 am, October 3, 2025
Used car buyers are getting increasingly more confident about their ability to afford their next vehicle, according to Auto Trader’s latest Retail Price Index report.
Of 1,000 of the platform users asked 45% said they felt ‘much more confident’ about their ability to afford their next purchase, as the average price of a used car reached £17,036. That represents a 0.6% increase on a year-on-year and like-for-like basis. It marks the second consecutive month of year-on-year growth, after two years of price contractions.
In total, nine in 10 people are ‘as confident’ or ‘more confident’, whilst 74 per cent of Auto Trader users plan to buy in the next six months, according to the survey data.
This robust level of consumer demand and car buying engagement is driving the used car price growth, reported Auto Trader, which scrutinised 79m cross platform visits to its digital platforms last month. It also reported a near record pace cars at which cars are selling – in September, the average time a car took to sell was 30 days.
The growth in prices is also a reflection of growing confidence among retailers to price their stock in line with the market. Auto Trader’s data shows that retail prices have been more stable in 2025 than in previous years, with all fuel segments of the market seeing year-on-year pricing strengthen over recent months – used electrics have seen a four per cent price increase since June.
Despite rising confidence however, there is still significant margin potential being missed due to in-demand vehicles being priced below market value. In fact, there are currently 63,000 used cars priced below their optimum retail value on Auto Trader, equating to an additional £26.7m margin opportunity – more than £3,000 per retailer.
However, a shortage of three-to-five-year-old cars means the majority of the market growth has been with independent retailers, selling older stock. The ongoing shortfall of three-to-five-year-old models saw that area of the market drop by 11 per cent.
Initially driven by the Covid-19 pandemic’s new car shortfall, the younger car supply challenge has been compounded by changes to new car sales channels. 60% is now the established level for the fleet mix, with fewer cars re-entering the market via traditional ‘franchise friendly’ routes, such as part exchanges or PCP upgrades or renewals, even during key plate change months.
Marc Palmer, Head of Strategy and Insights at Auto Trader, said: ‘The used car market is showing remarkable resilience and is carrying some real momentum as we enter the closing quarter of 2025. Prices are growing, demand is robust, and cars are selling at pace, which should give retailers confidence for the months ahead.
‘But, while the appetite for used cars is strong, sourcing remains the industry’s Achilles’ heel – especially for those reliant on younger stock. The growth in fleet sales over recent years means fewer cars are returning to the market via traditional routes, putting the squeeze on available supply and intensifying competition for the best cars.
‘To stay ahead, retailers must let data steer their strategy, identifying new sourcing opportunities and maximising every margin. In short: demand is robust, but in today’s market, smart data-driven decisions will determine the best performing retailers.’
