9:27 am, March 20, 2025
Used car dealers have been presented with ‘unique opportunities’ in 2025 but key challenges over sourcing stock are set to cause major headaches over the coming years.
That is according to fresh data from Auto Trader, which says that the motor trade could ‘redefine the role of the retailer’ in the years ahead.
The findings were made as part of extensive research which was presented as a special whitepaper at last week’s Car Dealer Live by Auto Trader COO Catherine Faiers.
The data showed a strong start to 2025, with robust consumer demand, as well as sky-high speed of sale and transactions.
High levels of demand were also reflected in the fact that Auto Trader enjoyed a record 87.1 million cross-platform visits in January.
However, the firm found that despite the positives, dealers are still feeling the impact of the pandemic when it comes to getting their hands on stock.
Summing up the key trends on stage in Gaydon, Faiers said: ‘If there is one word I would use to describe the start to the year so far, it’s “robust” – I think it’s been a mixed story for the first few months.
‘We’d been talking about a new normal for a long time but nothing about 2021 to 2023 felt normal. In 2024 there were some emerging market trends that felt like they were set for a period of time and I think that reflects a lot of what we’ve seen in 2025.
‘Many of the things we are talking about, and have been talking about over the last few months, are a continuation of those themes.
‘We are seeing very strong transaction volumes, which are up year-on-year and definitely lots of opportunity in the used car market.
‘At the same time we are seeing record levels of speed of sale on our platform which is being reflected in the wider market so there are definitely some good news headlines.
‘I guess with that speed of sale is coming challenges and a couple of challenges in particular. Firstly sourcing – we’ve talked a lot about the modelling we do around the shape of the used car parc and the shape of it and we know 30 to 40% fewer three to five-year-old vehicles in the parc this year.
‘Retailers are selling stock very very fast but trying to replenish that stock and source new stock is a challenge.
‘We’ve also seen from a pricing perspective that retail trends have not kept up either with consumer demand or the trend that we’ve seen with trade prices. That means that there has been a narrowing of the market opportunity at market level.’
You can read Auto Trader’s full data by clicking this link and a summary of the whitepaper is available to download from the Car Dealer Live website but here are a few of the highlights that we’ve picked out…
Source for profit, not stock turn
The rapid speed of sale seen throughout last year has also continued into 2025. In fact, February was a record (27 days) for the period, and at the halfway point, March is following suit at around 25 days.
Auto Trader, which was our headline partner at Car Dealer Live, says the trend is being fuelled by the combination of robust consumer demand, and in many cases, dealers unnecessarily under-pricing their stock.
The firm’s data shows that around 56,000 high demand used cars were priced below their market value in February, resulting in over £21m in potential margin being missed.
Supply will never be the same again
Auto Trader is confident robust levels of consumer demand will be sustained throughout the year, but potential used car market growth will be hampered by the three million cars that weren’t built between 2020 and 2022.
In 2019 there were an estimated 4.8m three to five-year-old cars in the UK car parc, but by the end of 2024, it fell by 37% to just three million.
By the end of this year, it will be an estimated 2.9m – 40% down on 2019 – making it the lowest level on record.
The retail market is becoming increasingly competitive as the number of brands operating within the UK accelerates. At the end of 2025, an estimated 72 brands will be selling cars, up from 45 in 2019.
UK passes peak petrol
According to Auto Trader’s analysis, 2024 was the year of ‘peak petrol’, with its share beginning to soften as electric supply continues to accelerate.
The number of EVs in the parc is expected to reach 1.8m this year, which is an increase of 38% on 2024’s 1.3m.
On Auto Trader, used EV stock rose 45% year-on-year in February, whilst petrol numbers fell by 5% – the eleventh consecutive month of decline. It is expected that by 2027, there will be nearly a million fewer petrol cars in the parc.
2024 also saw EVs reach a record 19.6% share of the new car market, with almost 400,000 registrations, largely driven by the Fleet sector. Auto Trader research shows that 34% of car buyers would consider an EV for their next car, which is up from 28% last year.
Meanwhile, nearly 90% intend to buy another one. Based on the now more than 1.3 million EVs currently on UK roads, not stocking electric means dealers could be missing out on around one million returning buyers.
Omnichannel isn’t optional
It’s one of the biggest changes to the motor trade since Covid and Auto Trader now says that a good omnichannel model is now ‘a fundamental requirement to retailing’.
The firm’s research shows that whilst some consumers contact a retailer before visiting, most (56%) just walk in, looking to speak to someone before finalising their purchase.
Three quarters of these walk-ins don’t feel the need to make contact first having already researched the car and retailer before visiting – online for consideration, visit for validation.
Meanwhile, 59% of visitors plan to buy from the retailer, either on the day, or later on. Most (69%) said it was the first time they had visited the retailer, and half don’t plan on visiting anywhere else.
Auto Trader says that the trend could signal ‘the end of the tyre kicker or browser’ with consumers now ‘highly qualified’ when they arrive at the forecourt.
‘Road ahead is going to look different’
Commenting on what the findings mean going forward, Faiers, added: ‘The big market forces haven’t changed significantly over recent years, but their influence has never been so keenly felt.
‘Automotive retailing is being shaped by the transition to electric vehicles, delivering omnichannel experiences, and the deployment of data and technology.
‘The road ahead for automotive retail is going to look different but with it comes a chance to redefine and shape the role of the retailer.
‘Whether its supporting confused consumers with the sale of an EV, enabling an omnichannel retailing journey or changing sales models, the role of the retailer is becoming more rather than less important.
‘It is retailing capabilities that will differentiate retailer performance and not dealing capabilities in the coming years. Delivering retailing excellence in a market that is more competitive, and complex is the path to success.
‘As well as being a period of change and evolution, it’s also a chance to build the businesses we want for the next decade. That requires planning and action, and the insights and ideas from this year’s Car Dealer Live is a good place to start and take the opportunities.’
You can read all the headlines from Car Dealer Live here.
