Used Car Market Soars To Highest In 5 Years

Whilst the pandemic seems like a distant memory, its repercussions in some sectors of the automotive world are only just beginning to get back to ‘normal’. The new car delays thanks to the parts shortage were the most talked about issue however they stabilised a long time ago. The used car market, however, is something that has taken much longer to readjust.

Back then, once car buyers realised they were going to have some wait on their hands to receive any sort of new car, demand for pre-owned cars, and subsequently prices, soared. Well after talk of the pandemic had subsided the back log of short supply of new car production meant the used car market remained at inflated price levels for longer than expected, and it is only in the last 18 months that this final readjustment reached ‘normal’ levels.

With the car market being an uncertain time these days thanks to tax changes, combustion engine bans, EV targets to be met and the cost of living constantly on people’s minds, it has been even more difficult to predict what will happen in the automotive marketplace.

A return to pre-pandemic levels

The latest figures from the SMMT (Society of Motor Manufacturers and Traders) have shown however that after 10 consecutive quarters of growth, the number of used car sales grew to its highest in five years. A further 1.7% rise in sales between March and July of this year saw almost 2 million vehicles change hands, totalling more than four million transactions for 2025 thus far. A level not seen since 2019, before the pandemic began.

The SMMT have attributed the rise in sales to the improved supply of used cars on the market, helped by the knock-on effect of a greater number of part-exchanges and vehicles coming to the end of their lease terms. This means that prices are more competitive, there are more choice for buyers, and they have the ability to shop around with greater bargaining power. Not only that but it also allows the opportunity to search for newer and lower mileage vehicles, especially for those vehicles who see greater deprecation within the first 6-12 months from when they were new.

The most popular vehicles

Data from dealerships has shown that not only is the more choice for the consumer, but subsequently the lower pricing has meant that pre-owned vehicles are selling quicker than before. This has been more evident in the small hatchback and family SUV vehicles with the popularity of the body styles and the competitive pricing meaning buyers are able to find just the model or specification they are looking for without having to stretch their budgets.

One of the factors associated with the greater choice on offer has been thanks to the rise in the supply of pre-owned electric vehicles. As the infrastructure and product offerings are getting better all the time, more and more buyers are tempted to try an EV as their next vehicle. This has also been helped by the fact that there are more affordable models on sale and the fact that EV’s often depreciate quicker than other types of powertrain.

According to the SMMT, between March and July this year, one out of every ten pre-owned cars were fully electric, almost 69,000 in total, a rise of 40% on the same time last year. Much of these sales figures are likely to have been a rush in late March to beat the tax changes that came in to force in April. With buyers rushing to not only take advantage of the last opportunity to not have to pay road tax for the upcoming 12 months, but also to avoid the Expensive Car Supplement for nearly new cars that would have been registered from April 2025 onwards.

But it wasn’t just fully electric vehicles that saw increases. Hybrid vehicles sales rose almost 28% on the same period last year, whilst plug-in hybrid sales rose just over 10%. The lower pricing meaning that EV’s and hybrids were now more obtainable for many would-be buyers, compared to their prices when brand new.

Despite the rise in electric and electric assisted vehicles, petrol remained the most popular type of engine choice, whilst diesel vehicle sales continued to fall. The former saw a 1.5% rise on the previous year to 1.13 million vehicles, whilst the latter fell a further 4.3% to just over 660,000 vehicles.

Now is the perfect time

So what does this mean for you? Well with more choice on the market and prices being more competitive than they have been for some time, it is the perfect time to look at changing your vehicle. Not only does it also mean you may be able to negotiate on the pricing a little, but that you are more likely to find the right specification you require and without having to stretch your budget too far.

Thankfully your Oracle Car Finance Account Manager is the bet place to start with all of this. Once you have discussed your budget and the type of car you are looking for, your Account Manager can use their expertise and knowledge of the car market to help guide you not only with the vehicle you are looking at buying, but how the residual value and equity is likely to affect its value in the future.

Obviously they will also help to find you the most suitable finance package for you and your circumstances, but it is comforting to know that they can do so much more than that. Everything from ensuring that your are purchasing from a reputable and trustworthy dealership, to checking the history of the vehicle and ensuring it is exactly as it is advertised, gives you peace of mind for your next vehicle purchase no matter what it may be.

Why Choose Oracle?