The UK used car market delivered a third consecutive year of growth in 2025, but the operational reality for dealers is becoming more complex, writes Tom Seymour.
Electrification and new brand entrants add some fresher wrinkles to automotive retailers thinking about their used car operations this year and into the future.
According to the Society of Motor Manufacturers and Traders (SMMT), used car transactions rose 2.2% to 7,807,872 units in 2025.
Battery electric vehicle (BEV) volumes surged 45.7% to 274,815 units, lifting market share to 3.5%. Hybrids rose 28.6% to 407,531, while plug-in hybrids increased 6.3% to 88,032.
Electric vehicles (EVs) in total accounted for 9.9% of all used transactions. Some of the UK’s largest used car operators such as Arnold Clark, are already seeing used EV volumes reach towards 20% of all sales.
Petrol and diesel still represented the majority of used car sales with a share of 89.9%, with petrol at 56.7% and diesel at 33.1%.
Forecasts from Cox Automotive Europe suggest overall 2026 used car volumes will reach 7,827,658 units, up 0.9% in 2025. That topline stability, however, sits against a structural shift in fuel mix, residual value (RV) behaviour and supply dynamics that demands tighter operational control.
Key operational focuses for this year will be less about chasing volume and more about mastering stock turn, capital efficiency, pricing discipline and preparation speed in a market defined by data transparency and margin compression.
Managing supply changes
Cox Automotive Europe forecasts diesel’s share of the used parc will fall from 30% in 2026 to 25% by 2029. Petrol is expected to decline from 57% to 52% over the same period.
In contrast, BEVs are forecast to grow from 5% to 12% of the parc by 2029, with PHEV and HEV vehicles rising from 7% to 11%.
The used plug-in vehicle market has gone from being “something to think about for the future”, to entering into a phase where it will structurally rebalance the UK car parc.
This will have a direct influence on sourcing strategies, residual risk modelling, workshop capability and forecourt mix for the remainder of the decade.
At the same time, structural supply gaps remain embedded in the market. The constrained new car volumes during the pandemic years continue to restrict five-to-seven-year-old supply.
Philip Nothard, insight director at Cox Automotive Europe, warns that retailers can no longer rely on traditional seasonality patterns. “What was once predictable seasonality is becoming increasingly indistinct,” he says.
Modern used car operations will be tracking evolving fuel mixes, diversified channels, shifting renewal cycles and manufacturer strategy changes.
Strengthen used car sourcing
Lucy Tugby, marketing director at Motors and Cazoo, says dealers built stock volumes in December, traditionally a quieter month, in preparation for a strong start to 2026. This resulted in a steady churn of used cars in January, with the average dealer stocking 54 units.
Franchised dealers, independents and supermarkets all closed the month with fewer vehicles left on inventory due to robust demand.
Inventory planning must look beyond monthly performance to quarterly momentum. Building stock ahead of anticipated demand remains a strategic lever, but it must be supported by pricing agility.
Average used car prices in January were £17,815, down 1.6% month-on month. The decline was driven largely by nearly new supply, with cars less than two years old down 1.6% to £28,382.
Nearly new models aged under six months with fewer than 5,000 miles accounted for seven of the fastest selling used cars. The MG3 averaged just 7.4 days on the forecourt.
The competitive pressure in nearly new underscores the importance of stock profiling and dealers must understand how age bands are performing and adjust acquisition accordingly.
Improve vehicle preparation
Consumer sentiment data reinforces the link between preparation quality and conversion. Motors’ latest Consumer Insight panel research showed 58% of buyers worry about purchasing unreliable vehicles.
That statistic places preparation standards at the centre of the used car value proposition and Tugby warns: “While speed is important, cutting corners risks undermining trust and long-term relationships.”
Clear warranty information and transparent condition reporting increase buyer confidence and accelerate sales. In a data-transparent marketplace, reputational risk from poor preparation can quickly undermine margin.
Speed up lead conversion
Shaun Harris, commercial director at Codeweavers, believes digital conversion metrics for used cars are as critical as acquisition metrics.
High-quality imagery and video content have a clear impact on online conversion rates and he advises a minimum of 20 images plus a video, alongside accurate and detailed descriptions.
Beyond presentation, Harris highlights the effectiveness of vehicle reservation tools, which, in some cases, deliver conversion rates above 70%.
Affordability transparency is equally important. Providing integrated finance calculations and part exchange valuations on-site removes friction and supports faster decision-making.
Response time also remains one of the most overlooked metrics in the used car sales industry. Here, Harris says there is a clear uplift in success rates when enquiries are answered within two hours, ideally within the first hour. For multi-site groups, that requires process discipline and system integration.
Customers must be able to engage through web, chat, phone, social media or in person with consistent communication across all channels.
Build scalable used operations
Harris says dealers building scalable, repeatable models prioritise seamless system alignment and eliminate duplicate data entry. Consistency in vehicle presentation is critical. Clear, simple, technology-driven listings help customers navigate stock confidently.
He also notes growing customer demand for transparent and fixed pricing, which continues to gain traction over traditional negotiation models.
Harris says: “The most scalable used car operators trust in data-led decision-making, because, while data is rarely wrong, human instinct can be.”
While increasing transparency has reduced the margin for instinct-based pricing, the best modern used car operators will be combining their market experience alongside data to set them apart. This feature first appeared in AM’s Running A Modern Dealership report.
Case study: 
Dales Central Motors
Dales Central Motors offers a practical illustration of how data-led stock management can materially improve performance.
The family-owned group operates seven franchises and a multi-brand van centre across two sites in Cornwall.
It typically holds between 300 and 400 used vehicles at any time and estimates it sells one in every three or four used cars transacted in Cornwall.
Two years ago, Dales onboarded Indicata’s used car pricing and insights platform. Since then, it has reduced stocking days from 51 to 40, a reduction of 11 days, equating to more than 20%.
Danny Fox, group sales manager, oversees the used car strategy across the group. His approach is explicit: “Our pricing matrix is focused on stock turn as we know that if we get that right that used car profitability will follow.”
Twelve sales managers and business managers have access to the platform. Group stock is reviewed weekly, with an external monthly session involving Indicata’s customer success manager to review the status of every used car in detail.
The discipline extends beyond headline pricing. The platform provides what Fox describes as an “umbrella view” of every car, including pricing, imagery and market position.
This enables brand specialists to fine-tune individual vehicles based on franchise knowledge, while retaining group-wide strategic oversight.
In a market often described as short of stock, Fox says the data has enabled the group to increase prices on certain high-demand, low-supply models with confidence, rather than resorting to discounting.
He adds: “With the current used market short of stock our weekly pricing review often encourages us to increase prices on certain models rather than reduce them.”
Dales uses data to balance local market conditions with national opportunity. Indicata provides a national sweep of total market stock, allowing the group to gauge where a vehicle sits locally and nationally.
Around 10% of Dales’ used sales are to buyers outside Cornwall, particularly higher value Cupras where buyers will travel for a particular specification or colour.
Online stock visibility is therefore integral to its model. Vehicles are priced and prepared for digital retail as early as possible, often before physical arrival.
In peak registration months such as March and September, the team identifies part exchange stock from new car sales and prices it ready for online listing before the vehicle has even arrived on site. This approach shortens time to market and reduces exposure to shifting valuations.
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