Dealers hoping for the nearly-new used car market to return to normal may be waiting until the 2030s, with new Solera Cap HPI forecasts warning that the most sought-after stock will remain in short supply for years.
The vehicle data specialist said the one-to-three-year-old car parc, a crucial source of ex-PCP, lease and fleet vehicles for franchised and independent dealerships, is set to remain more than 1.3 million units below its pre-pandemic peak by 2030.
Used car supply forecast: key figures
- 1-3-year-old parc fell from 5.19m cars in 2018 to 3.18m in 2024
- Volumes recovered to 3.76m in 2026
- Only 3.85m 1-3-year-old cars forecast by 2030
- Age band expected to be >1.3m cars below pre-pandemic peak
Cap HPI’s forecasts are based on historic registration data, Department for Transport attrition modelling and its own new car registration projections.
It shows that the one-to-three-year-old parc fell from 5.19 million vehicles in 2018 to 3.18 million in 2024, a decline of almost 39%. Although volumes have recovered to 3.76 million this year, Cap HPI expects supply to flatten off. By 2030, it forecasts the one-to-three-year-old parc will reach only 3.85 million vehicles, remaining more than 1.3 million units below its pre-pandemic peak.
Nearly-new cars remain scarce
The shortage reflects the delayed impact of the pandemic-era decline in new car registrations, which is now feeding through into used car supply.
UK new car registrations fell from a peak of 2.69 million in 2016 to 1.63 million in 2020 and remained around 1.6 million through 2022. Those missing new vehicles are now creating a thinner pool of nearly-new stock for dealers.
The three-to-five-year age band is expected to follow a similar pattern. Having stood at 4.98 million vehicles in 2020, it has fallen to 3.05 million in 2026.
Cap HPI expects that segment to recover later in the decade, rising to 3.83 million by 2030, but still remaining 1.15 million vehicles below its previous peak.
Dylan Setterfield, head of forecast strategy at Cap HPI, said: “The impact of the pandemic on new car registrations continues to work its way through the vehicle parc and is creating significant pressure in the age bands most sought after by dealers and consumers.
“While registration volumes have recovered in recent years, the market is still dealing with the consequences of several years of reduced supply. As a result, retailers should expect competition for quality nearly-new stock to remain intense for some time.”
Affordable supply tightens
Dealers focused on more affordable used cars also face a worsening supply outlook, according to the forecast.
The five-to-ten-year-old parc stood at 10.54 million vehicles in 2024, but Cap HPI expects it to fall to 7.29 million by 2030.
That decline could have significant implications for independent retailers, used car supermarkets and franchised dealers seeking older part-exchange stock to support affordability-conscious buyers.
The analysis also points to a wider reduction in younger used vehicle availability. Vehicles aged under 10 years are forecast to fall from 22.65 million in 2020 to 18.42 million by 2030, a reduction of almost 19%.
Cap HPI said the reduction in supply is likely to support used vehicle values, while increasing sourcing challenges for retailers and reducing choice for consumers.
ZEV Mandate may add pressure
Cap HPI’s forecasts also suggest a second supply constraint could emerge later this decade.
The company expects new car registrations to remain above two million units in 2026 and 2027 before declining to around 1.68 million by 2030.
Its modelling attributes much of that reduction to the ZEV Mandate, which requires manufacturers to increase the share of battery electric vehicles they sell each year.
According to Cap HPI, some manufacturers may respond by limiting overall vehicle supply, particularly of petrol and diesel models, rather than increasing BEV volumes sufficiently to meet compliance targets.
The company said its forecasts are based on current policy assumptions and could change if the Government makes further amendments to the mandate framework.
Setterfield said: “Our current forecasts indicate that the industry could face a second supply challenge later in the decade as manufacturers adapt to increasingly demanding (ZEV) targets. We are already seeing cases where OEMs are either ceasing to produce petrol and/or diesel versions of some models or planning much-reduced ICE volumes in the coming years.
“If overall registration volumes decline, the impact will inevitably be felt in future used vehicle supply, extending the tight market conditions dealers are already experiencing. Obviously, this may change if the current targets are relaxed.”
What dealers need to know
For dealers, the findings point to a used car market in which sourcing strategy, stock turn and pricing discipline will become even more important.
Retailers may need to broaden sourcing channels, place greater emphasis on retaining part-exchanges, strengthen service-to-sales opportunities and prepare customers for tighter choice in the nearly-new market.