If you’ve been following the economic headlines lately, you’d be forgiven for approaching the final months of 2026 with some caution, writes Ian Plummer, chief customer officer, Autotrader.
Household budgets remain stretched, the Budget has just been announced and October’s consumer confidence figures haven’t done much to lift the mood. Look at what’s happening in our market, though, and there’s a far more encouraging story to tell.
That isn’t about overlooking the pressures. Anyone working in automotive retail knows how challenging trading can be. But ours is an industry that has always weathered considerable disruption, from the financial crisis to the pandemic and recent cost-of-living pressures. That’s because it has something important in its favour: people still need cars.
The school run, commute and weekly shop carry on, whatever the economic outlook.
Some buyers may wait a little longer to replace their car; others will choose something older or less expensive. For households with less financial breathing room, those decisions can be difficult. But a change in what someone buys doesn’t necessarily mean they leave the market altogether.
A more encouraging picture
It’s worth keeping that distinction in mind when looking at the latest consumer confidence levels.
October’s official index fell 11 points to minus 24, but that takes it back to levels seen earlier this year. The fall catches the eye – and the headlines! – but the level is rather more familiar. In our analysis, the survey doesn’t have a sufficiently reliable relationship with car transactions to feature in our forecasting models.
Instead, those models draw on 18 economic indicators, with data stretching back 30 years, alongside automotive market dynamics. Our latest forecast points to nearly 10.2 million new and used transactions in 2026, up 3.4% and the largest combined market since pre-pandemic 2019.
Within that, we expect at least 2.21 million new registrations, up 9.5%, and 7.95 million used transactions, up 1.9%. The encouraging point is that both markets are growing, rather than new car offers simply moving a small proportion of demand from one to the other.
Recent trading gives us further cause for reassurance. In the first half of October, used cars took an average of 27 days to sell, three days faster than September and two days faster than the equivalent period last year. Hopefully, that signals a solid close to 2026 for retailers of all types and sizes.
Looking under the bonnet
Of course, the market isn’t untouched by wider pressures. Against a backdrop of rising fuel costs, electric cars were taking 25 days to sell, compared with 32 for diesel where price pressures have been extensively covered by the media in recent times. September’s used electric demand rose 40% year-on-year, while diesel demand fell 19.2%. Buyers are responding differently across the market, rather than all moving in the same direction.
The pricing picture is similarly varied.
According to our most recent Retail Price Index, September’s like-for-like retail prices softened 1% overall, but electric prices rose 2.8%, while cars aged 10-15 years recorded growth of 5.6%. There’s plenty happening beneath the average.
That matters when trade values soften, as they have been over recent months. Where retail demand remains healthy, a lower wholesale price can offer an opportunity to buy well, rather than a reason to reduce the forecourt price too. Otherwise, there’s a risk of giving away margin that a very buoyant retail market still supports.
More choice, improved affordability
New cars offer encouragement too. October traffic to our new car platform is still strong as are lead volumes with stock 13% higher than prior year and average discounts remain above 10%. Competition is bringing buyers more choice and improved affordability, albeit these attractive offers also create challenges for nearly new stock, and volume growth doesn’t always automatically translate into margin.
Looking into 2027, stronger new car registrations should gradually help replenish younger used stock, although supply gaps will take time to work through. We’ll be watching the impact of the Budget and wider economic developments closely, of course, but history has shown uncertainty alone isn’t a reason to expect the underlying need for cars to weaken.
There are good reasons, then, to approach the coming months with confidence, not because trading is easy, but because buyers remain active and cars remain a necessity for most households. For individual businesses, that national picture is most useful alongside the detail: which cars are attracting interest, how quickly they are selling and what buyers are prepared to pay. As always, it pays to analyse the data carefully.
Uncertainty is not, by itself, a reason to retreat. The evidence supports continued activity and a market capable of adapting. We should remain alert to the risks without talking ourselves into a downturn – or pricing as though one has already arrived.
Author: Ian Plummer, chief customer officer, Autotrader
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