10:31 am, December 1, 2025
The UK car market is set to return to pre-pandemic levels next year, with experts praising the industry’s ‘continued strength and resilience’.
Analysis from Auto Trader has forecasted that a whopping 10.2m new and used car transactions will take place in 2026 – levels which were last seen back in 2019.
Numbers have been significantly down since the outbreak of Covid, with dealers and manufacturers forced to battle years of ‘unprecedented volatility’.
Auto Trader says that things have been slowly improving since 2022 and it is now confident of a full retail recovery by the end of next year.
The growth is largely being fuelled by a strong used car market, which Auto Trader is expecting to grow by 3% to 8.2m sales in 2026.
On the flip side, the new car market is expected to grow by just 1% to 2.035m registrations, as the sector continues to battle fierce competition and regulatory pressures.
Despite this, Auto Trader’s analysis has found ‘resilient’ consumer confidence, with a record 982.3m visits to its platform over the last 12 months – 14.8m more than the previous period.
Meanwhile, 91% of car buyers remain as confident, or more confident, in their ability to afford their next vehicle as they did last year, with 74% looking to purchase a car in the next six months.
Experts say that this demand is ‘insulating’ the used car market from wider economic uncertainty, with buyers continuing to view motoring spend as a ‘necessity’.
Looking ahead to 2026
Predicting what the next 12 months will look like, Auto Trader says that the tightening of used car supply, the next phase of EV adoption and intensifying brand competition will be the biggest challenges for the industry to deal with.
Dealers will also have to deal the continued impact of almost two million new cars lost during the pandemic, which are now moving beyond nearly new stock and into the core used market.
Auto Trader forecasts 1.6 million fewer 3–5-year-old cars will be sold than in 2019, with a 17% year-on-year drop in 5–7-year-old vehicles. This deficit will hit retailers across the board and is set to persist for several years.
At the same time, the The Electric Car Grant is expected to boost the new EV market, with used electric models also now selling faster than any other fuel type.
Meanwhile, customer choice is at an all-time high with 72 brands now competing for UK car buyers. This is expected to rise to 80 by the end of next year with Auto Trader suggesting that brand loyalty now counts for less than it once did.
Commenting on the year ahead, Auto Trader’s chief commercial officer, Ian Plummer, said: ‘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.’
