Bargain prices drive used car sales boom, but new cars struggle to sell

Used car sales topped the 2million mark in the first quarter of 2025, a level of activity that hasn’t been seen since before the pandemic in 2019.

The latest figures from the Society of Motor Manufacturers and Traders (SMMT) suggest that while pricey new models may be struggling to attract customers there’s a big appetite for used models. Bargain-priced used EVs being sold off by the fleet and leasing sectors are looking especially appealing to some buyers.

Overall, used car sales grew by 2.7 per cent in the first quarter of 2025 compared to the first three months of last year, taking the total number of secondhand cars changing hands to 2,020,990. Petrol cars were most popular as expected, while used diesel sales dipped by 3.1 per cent. 

Used hybrid sales roared away with a 30.2 per cent increase taking numbers of transactions up to almost the 100,000 mark. It was EVs, however, that were really setting the pace with 58.5 per cent annual growth and 65,850 cars finding their second or third owners.

Commenting on the trend towards used EVs, Mike Hawes, SMMT Chief Executive, said: “More second-hand buyers are opting for electric vehicles, with greater choice and affordability enabling more people and businesses to switch. Sustaining and expanding this growth, however, depends on a healthy supply of EVs from the new car market – which in turn requires fiscal incentives alongside a nationally accessible and affordable charge point network so that everyone, whatever their budget or driving needs, can benefit from zero emission motoring.” 

As a result of that sentiment, the SMMT continues to lobby for a 50 per cent reduction in VAT on new EVs, reductions to the expensive car VED supplement, and a reduction on VAT paid for public charging. These measures “would all help increase uptake of new cars and, in turn, promote a vibrant used market”, the organisation stated.

John Cassidy, Managing Director of Sales at Close Brothers Motor Finance, said: “Though motorists have a wider range of affordable choice in the second hand market, another rise in used car sales as well as a notable dip in April’s new registrations data demonstrates the challenges currently facing consumers. The rising uptake in second hand EVs is positive, as drivers have more stock to choose from at affordable prices, but the Government should be concerned that buyers shifting away from purchasing new EVs could hamper their Zero Emission Vehicle (ZEV) mandate targets.”

Gaurav Jain, Commercial Director at Carwow, the online marketplace and sister brand to Auto Express, commented: “The high level of demand for used cars in Q1 is, in part, a consequence of persistent new car price inflation. Over the past five years new car RRPs have increased 35%, with one in four new cars configured on Carwow with RRPs of £40,000+ in 2024. At the same time, customer budgets have broadly remained flat, driving increased interest in used cars.”

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