As 2025 comes to a close, Autotrader’s analysis points to a UK car market that has regained much of its pre-pandemic strength. The year is expected to finish with 9.8 million total transactions, the largest combined new and used market since 2019.

According to Chief Commercial Officer Ian Plummer, the return to scale reflects “the resilience and the fundamental necessity of car ownership for consumers,” even in a year shaped by elevated inflation and interest rates.

Autotrader expects this recovery to carry forward. After five years of volatility, the company forecasts the retail market will return to its 2019 size in 2026, with 10.2 million transactions, a milestone Plummer describes as “a clear signal of how robust underlying consumer demand has remained.”

Used market strength sets the tone for 2026

The used sector continues to anchor the recovery. Autotrader forecasts a 3% rise in used sales next year, to around 8.2 million, extending the market’s steady expansion since 2022. In contrast, the new car market is expected to see only 1% growth, reaching 2.035 million registrations, held back by sharpened competition and regulatory obligations.

Despite macroeconomic pressure, consumer appetite has been remarkably steady. Autotrader logged 982.3 million visits over the past year, nearly 2,000 per minute, and 91% of buyers say they are as confident or more confident about affording their next car compared with last year. With 74% intending to buy within six months and nine in 10 viewing motoring spend as essential, the used market remains insulated from economic swings.

The new market is more sensitive, but Plummer notes that increasing competitiveness and expected softening in interest rates may provide momentum: “Success in 2026 will be defined by agility, especially in a new car market where price, value and clarity count more than ever.”

Three structural forces shaping 2026

Autotrader identifies three core themes that will set the tone for next year: used stock constraints, EV momentum and an expanding brand landscape.

1. Used stock: the gap moves up the age curve

The shortfall created by the 2 million new cars not sold during the pandemic continues to ripple through the market. In 2025, independent retailers (+4.3% YoY) and supermarkets (+5.7%) grew used sales faster than franchise dealers (-0.7%). Initially concentrated in younger stock, shortages are now affecting mainstream age segments.

Autotrader forecasts 1.6 million fewer 3–5-year-old cars in 2026 compared with 2019, and a 17% year-on-year drop in 5–7-year-old vehicles. Although an uplift in 3-year-old cars, thanks to stronger 2023 registrations, will ease pressure, the older-stock gap is set to influence retailers for years.

According to Plummer, retailers will need to “take tangible steps to optimise sourcing and retention, not only of customers but also of vehicles,” as competition intensifies around a tightening supply pool.

2. EV transition: a new phase of growth

Next year will mark a new stage in the EV transition. A combination of the Electric Car Grant (ECG) and broader model choice has pushed EV consideration back to earlier highs. ECG-eligible models, or those with similar incentives, now dominate new EV enquiries on Autotrader.

In recent months, EVs have accounted for around 25% of new car transactions, three points above the year-to-date average. While still shy of ZEV mandate thresholds, the trend shows clear growth potential.

In the used EV market, demand continues to exceed supply. Used electric vehicles are selling faster than any other fuel type, supported by a 30% rise in demand on Autotrader’s platform, and 37% growth for 3-5-year-old models. Independent retailers are selling used EVs in an average of 20 days.

Plummer notes that the EV shift will reward retailers willing to adapt: “A conquest mindset is essential, particularly in the used EV space, where the opportunity is moving quickly.”

3. More brands, less loyalty

The brand landscape is expanding at pace. There are now 72 brands active in the UK, 27 more than in 2019, with around 80 expected by the end of 2026. Customer loyalty is weakening, especially for EVs, where only one in five electric buyers return to the same brand.

With more choice, greater price variation and lower loyalty, Plummer says the competitive environment will require “a clear value proposition and the ability to target and convert customers in an increasingly fragmented market.”

A competitive but promising 2026

Autotrader’s view of the year ahead is one of opportunity shaped by structural change. Growth is expected, but it will not be automatic. As Plummer puts it, “This is not easy growth.” Retailers and brands that adjust quickly, diversifying sourcing, sharpening digital performance, and pursuing more data-driven conquest strategies, will be best placed to thrive in 2026.