8:59 am, January 28, 2026
The UK used car market has had a strong start in 2026 with consumer demand holding up well and prices remaining stable, but there’s a dark cloud on the horizon.
Speaking in the video posted at the top of this story, Autotrader’s Marc Palmer appeared on Car Dealer Live and explained that while the market is showing clear signs of health, a sharp fall in the supply of five to seven-year-old cars is now imminent.
‘We’re already seeing the market looking solid,’ said Palmer, adding that ‘market health is pretty good’ as January is well underway.
The momentum seen in the used car market at the end of 2025 has carried through into the new year.
‘The start to January has been good – really positive actually. We’re pretty optimistic. Retailers are all reporting pretty good order take on new cars, and that the used market has also started pretty well for them in the first few weeks.’
However, while demand remains strong, supply is set to tighten significantly as the long-term impact of the pandemic feeds through the market.
Palmer explained that the loss of around ‘two and a half million new cars’ during Covid has created a gap that is now moving into older age brackets.
The impact has already been felt in younger used stock, but attention is now turning to older vehicles.
‘Five and six-year-old cars are about to see a drop of between 25 and 30% this year,’ Palmer warned. The situation is expected to worsen in 2027, when the fall could reach ‘35%-plus’ for cars aged five to seven years.
Palmer explained that this looming shortage will affect a far wider range of dealers, particularly independents who traditionally rely on second and third-owner vehicles.
‘If you sell cars over five years old the impact of the pandemic drop hasn’t touched you yet probably, but it’s about to.’
Palmer added: ‘You’ve now got a lot more retailers affected. There’s now more competition for available supply, and there’s now a greater need to diversify.
‘Retailers will need to think differently about the ages of cars that they’ll be stocking. If you’ve got a 20-car pitch, for example, you’re about to lose five or six of those cars this year.
‘To fill those slots you will need to be thinking differently – different ages, fuel types, makes and models. You will also need to be thinking about retention – How do I keep hold of the cars that I’m bringing in? How do I keep hold of the buyers? Because they’re going to be looking around trying to find cars of this age as well.’
Despite the challenges ahead, the message to dealers is not to panic.
‘There are cars to sell,’ Palmer stressed, ‘but they might not be the cars that retailers have been used to selling.’
With buyers active and confidence improving, Autotrader urged dealers to ‘be confident in the market and act fast’ to secure stock as competition intensifies.
Elsewhere in the interview, Palmer explained how the new car market could see as many as 80 car brands all vying for consumers’ attentions, and how the total new car market is forecast to reach around 10 million transactions in 2026.
