Used car market gathers pace in February with robust retail demand

The used car market continued to build momentum in February, with a 3% uplift in retail demand, according to new data from Auto Trader.

February recorded robust used car demand, speed of sale and transactions.

There was also growth in used car prices, with the average used car rising 0.5% on a month-on-month and like-for-like basis (£16,671), marking the first monthly increase in retail values since October. 

Auto Trader said the price increase has been fuelled, in part, by the ongoing squeeze in used car supply, which overall fell 2% year-on-year (YoY) in February, combined with strong levels of used car buying demand.

This is evident in the increase in used car transactions last month, which Auto Trader’s Retail Sales data indicates rose circa 3% in the same period last year.  

The robust underlying health of the used car market is reflected in the consumer engagement on Auto Trader, which saw a 2.8% YoY rise in the number of average daily visits to its platform last month.  

Speed of sale average at 28 days 

It’s also highlighted by the current speed at which used cars are selling.

It took an average of just 28 days for a used car to sell last month, which is the fastest pace recorded since September, and consistent with the same period last year.

Highlighting the nuance of the retail market, there was significant variances in speed across different segments; for example, 5–10-year-old cars left retailers’ forecourts in just 25 days, while those aged below 12 months, took an average of 32.  

With improving economic trends, such as rising consumer confidence following the Bank of England’s third interest rate cut since August last month, February’s performance provides a reassuring outlook for the coming months.

These data points complement Auto Trader’s own research which shows that 92% of nearly one thousand surveyed consumers are at least as confident as they were last year in their ability to afford their next car (up from 90% in February 2024), while 75% of those on Auto Trader are still intending to purchase a car in the next six months. 

Top 10 used car price growth (all fuel types) | February 2025 vs February 2024 like-for-like 

Pricing confidence builds among retailers 

The acceleration in retail prices is much needed due to the recent rise in trade values, which recovered more quickly following the steep decline in autumn 2023.

Last month’s slight increase points to greater pricing confidence among retailers, particularly franchised businesses, which Auto Trader data indicates have increased their average prices by a larger amount than their independent counterparts.

This is especially true in their younger stock, where the recent squeeze in supply is being felt most keenly.     

More broadly, Auto Trader is seeing fewer vehicles enter the retail market below 100% of their value.

However, while below recent highs, the company’s analysis still shows around 8,500 retailers are advertising circa 56,000 high demand used cars below their market value, resulting in over £21million of potential margin being missed.

Richard Walker, Auto Trader’s data & insights director, said: “Despite some initial turbulence, we’re seeing the market build some good momentum; retail prices are growing, demand is healthy, cars are selling quickly, and critically, transactions are above where they were last year.

“It’s especially encouraging to see more retailers respond to tightening margins by pricing their used car stock more confidently, using the insights available  to unlock more from the metal.  

“While our outlook for the rest of the year is robust, retailers continue to face a nuanced and complex market which will move at pace.

“Combining the best of data and technology with your salespeople, will be key in the months to come to adapt to these changes and to drive performance.” 

Used EV demand rockets as prices soften 

Looking at the data at a more granular level reveals the complexity in the used car market. The 3-5-year-old segment remains heavily squeezed, with levels of supply down circa -11% YoY in February, whilst the volume of ‘nearly new’ cars (those aged below 12 months) entering the market, rose 10%. 

This is also evident in fuel types. Demand for used electric vehicles was up a significant +24% YoY last month, but it was far outpaced by levels of electric supply, which increased at almost double the rate (+44%). In contrast, although demand for used petrol and diesel cars was down -4.1% YoY and -10.9% respectively, both were ahead of supply levels (-5.4% YoY and -19.2%). As a result, the average price (£25,395) of a used EV was down -1.5% MoM in February, whilst the average price tag for both a used petrol (£14,685) and diesel (£13,925) car rose +0.8% MoM.   

This imbalance is even more acute in the 3-5-year-old age cohort of EVs where demand is even stronger (+56%), but the supply into the market has surged (+128%), resulting in a -1.4% MoM drop in prices last month.

Top 10 used car price contraction (all fuel types) | February 2025 vs February 2024 like for like