Positive outlook predicted for used car market in 2025

Used car prices are predicted to rise in 2025 as the market deals with the impact of a Covid-affected 2022, where just 1.61 million new cars were registered. 

Autorola expects there to be a shortfall of between 500,000 and 700,000 used cars coming into the market this year, compared with pre-Covid levels (2.31m new cars were registered in 2019) with prices rising as demand exceeds supply. 

In the last quarter of 2024, the used car market experienced an unseasonal rise in prices for all four fuel types sold on Autorola’s online platform.

Petrol cars bounced back from Q3 to Q4 with a 6.4% increase (£934) to £14,454 at 40 months and 22,486 miles, while hybrids delivered a 3.1% price increase (£663) in the same period to £21,386 at 35 months and 20,018 miles.

Used electric vehicle (EV) prices, meanwhile, rose by 3.1% in Q4 (£381) to £18,668 at 28 months and 17,514 miles while diesel cars reported a small £125 price rise (0.7%) to £18,668 at 43 months and 32,607 miles, as market share for the fuel type fell to a record low of just 17.2%.

Petrol remained the dominant fuel type in Q4 taking 61.9% of used cars sold online, hybrids rose to 17.8%, while EVs fell back to just 3.0%. 

“Q4 2024 provided us with an early sign of used prices rising and this trend will continue throughout 2025 and into 2026 because of the large shortfall in used cars coming into the market,” explained Autorola UK’s country manager Neil Frost.

“That means strong competition for used stock in the wholesale market which will translate into higher retail prices for consumers.” 

At Auto Trader, the average price of a used car in December was £16,649, down 0.6% month-on-month versus November. 

In 2023, prices decreased 2.3% from November to December, mainly due to a drop in trade valuations which led to an impact on pricing, meaning prices were out of sync with what should be a strong market for that time of year. 

This year’s price movements, reported by Auto Trader, are more in line with seasonal norms highlighting the more robust market dynamics in 2024. 

While year-on-year pricing was down 4.1% in December, it said that decrease was the smallest year-on-year drop seen throughout 2024, a positive trend as we enter 2025. 

This also marks the sixth consecutive month where year-on-year price drops have reduced, the peak was in June 2024 with 10% year-on-year price drops. 

The December figures from Auto Trader show the average price of a used petrol car down 3.2% year-on-year at £14,782, diesels down 4.1% year-on-year at £14,087 and EVs priced 10.6% year-on-year lower at £26,139. 

The decline in prices of younger cars is mainly impacting the movement of prices overall as there are pockets of strength for some cohorts of vehicles that have strong demand but shorter supply, says Auto Trader.

In December, cars sold three days quicker than 2023, taking 33 days to leave forecourts, down from 36 in 2023 as robust demand tempers seasonal trends. 

December speed of sale has been longer in recent years 36 days in 2022 and 34 days in 2021, making 2024 the quickest ever. 

EVs continued to be the fastest selling fuel type at 28 days, with three-to-five-year-old EVs selling within 24 days on average. 

Overall, Auto Trader expects the used EV market to remain robust into 2025, with supply still growing strongly, but demand keeping pace in most vehicle age cohorts. 

Richard Walker, Auto Trader’s data and insights director, said: “There is plenty to be positive about as we enter 2025 with last year ending on the fastest selling December in years and consumer demand appearing resilient. 

“There’s a trend towards more stable pricing, with year-on-year price drops softening, and so we’re seeing pockets in the market where there is missed margin opportunity. As hardening trade prices squeeze profit this will be even more important to address into 2025. 

“The data shows that there is profit opportunity out there for those who use the right tools and information. To unlock success in 2025, ensure your pricing strategy optimises for speed of turn with margin maximisation as a priority.”