Used car dealers are rapidly increasing funding for electric and hybrid vehicles as the market shows strong early momentum in 2026, according to new data from NextGear Capital.
The Cox Automotive business said its latest analysis of dealer activity between January and February highlights growing confidence across the sector, with a sharp rise in funding for alternatively fuelled vehicles.
EV funding accelerates sharply
Dealers funded 807 EVs and 1,011 hybrid vehicles during the first two months of the year, representing increases of 157% and 77% respectively compared with the same period in 2025.
The scale of growth significantly outpaces last year’s figures, when EV and hybrid funding rose by just 36% over the same period.
Chris Moore, head of credit and customer operations at NextGear Capital, said: “The increase in alternative fuelled vehicles funded this year is one of the largest we’ve seen. By comparison, growth during the same period in 2025 was only 36%. With more hybrids and EVs entering the used car market, dealers are clearly becoming more confident in stocking these vehicles.”
Dealer confidence building
Alongside the shift towards EVs and hybrids, dealers increased both the number of vehicles on their funding plans and their credit limits.
Average credit limits rose by 28% year-on-year, with independent dealers seeing a 27% increase and franchised retailers recording a 21% uplift, well ahead of the 5% growth seen between 2024 and 2025.
The number of vehicles on dealers’ plans also rose by 11.1% year-on-year, underlining stronger stocking activity heading into the Spring trading period.
Moore said: “Credit limits remain a key performance indicator of market health, as they reflect both dealer demand for funding and funder confidence in risk exposure. We undertake extensive analysis when making decisions to increase a customer’s credit limit. Therefore, sustained growth in credit availability points to improving credit profiles, stronger dealer performance and increased confidence in the resilience of the used market.”
Stock turn rates remained stable year-on-year, reflecting typical seasonal trends, while the average cost of funded vehicles increased to £11,018, up 4.6% on the same period last year, reflecting both the rising price of used cars and dealers’ increasing willingness to fund higher-value stock.
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