Used car demand rebounds in January but supply squeeze ahead

The UK used car market has started 2026 with strong buyer engagement and stable transaction volumes, according to new data from Autotrader.

However, retailers are being warned to prepare for a significant reduction in the availability of mid-aged stock over the next two years.

Following the seasonal festive slowdown, visits to Autotrader rose by 24.7% month on month in January to 86.3 million, underlining continued consumer appetite for car ownership.

Autotrader said nine in 10 consumers still consider ownership essential, while more than eight in 10 buyers feel at least as confident about affording their next car as they did a year ago.

Buoyant demand has supported used car values.

Autotrader’s Retail Price Index shows the average used car price reached £17,294 in January, the highest monthly average since November 2023.

On a like-for-like basis, prices were up 0.2% year on year and 0.1% month on month.

Price stability is being driven by specific segments of the market.

The 10 to 15-year-old age bracket remains the strongest performer, with average prices up 9% year on year to £6,949.

Autotrader said demand in this segment rose 7.3% year on year, while supply fell by 0.3%, creating high levels of engagement and margin opportunity for retailers.

Top 10 used car price growth (all fuel types) | January 2026 vs January 2025 like-for-like

Mixed performance on fuel types

Fuel type trends remain mixed. The average price of a used petrol car rose for the tenth consecutive month in January to £15,039, up 1.5% year on year.

This reflected demand falling by 2.5% year on year, but still ahead of a sharper 7.1% decline in supply.

By contrast, demand for used electric vehicles increased by more than 16% year-on-year, but with supply rising by 33.1%, average used EV prices fell 7.2% to £23,678.

Stock turnover remained healthy in January, with cars taking an average of 41 days to sell, in line with January 2025.

EVs were again the fastest-selling fuel type at 38 days, with three to five-year-old EVs selling in an average of 34 days, reflecting strong demand where pricing is closer to petrol equivalents.

Warning on older age stock

Transaction volumes were broadly flat year on year, pointing to a stable market overall.

However, Autotrader warned that the long-term impact of around 2.5 million new cars not sold during the pandemic will increasingly affect older age brackets.

The volume of five to six-year-old cars is forecast to fall by 25% to 30% in 2026 compared with 2024, with a potential drop of up to 35% for five to seven-year-old vehicles in 2027.

Marc Palmer, Marc Palmer, said: “The metrics for January tell a clear story: the market is healthy, buyers are back in force, and stock is selling.

“To see visits rebound by nearly 25% bringing millions of eyes back to our partners’ stock confirms that the seasonal bounce is as strong as ever.

“But while the year has started with momentum, it’s important we keep our eyes on the road ahead.

“The pandemic gap is moving through the market, and we expect a sharp drop in the availability of 5-7-year-old vehicles over the next couple of years.

“We’re already seeing some retailers outperform the market by adapting to these shifts, but the pressure is only set to grow.”

Palmer said success in 2026 will come to those retailers that are using data to identify the pockets of profit, diversifying into different ages and fuel types, “rather than waiting for the old supply chains to return”.

Top 10 used car price contraction (all fuel types) | January 2026 vs January 2025 like-for-like