UK used car forecasts

3 min read

Building on recent used car figures and insights, the market factors described in this article, and in line with previous Cox Automotive forecasts, we have adjusted our used car registration forecasts accordingly. They have been broken up into three scenarios – upside, baseline, and downside – each with its justification below. The baseline is, we believe, the most likely scenario to materialise.

2024 Used Car Registrations

Cox Automotive Used Car Registration Forecast

Upside scenario

In the upside scenario, a balanced recovery unfolds, driven by increased choice, heightened consumer confidence, and a notable surge in Battery Electric Vehicle (BEV) ownership. 

• New vehicle registrations follow a steady recovery trajectory, alleviating the strain on the cost of owning used vehicles compared to new ones. 
  
  

• Expansion of used vehicle options: Recent production shortages, which previously limited choice in the used market, gradually ease as inventory from fleet and rental sectors enters the market. This influx and a notable upturn in consumer confidence support increased supply volumes. 
  
  

• Economic measures, such as lower inflation and declining interest rates, implemented sufficiently in 2024, stimulate consumer confidence and enhance overall spending. Consequently, this alleviates pressure on both the leading and broader automotive sectors. 
  
  

• The used EV market experiences significant expansion as consumer interest in ownership rockets. This heightened interest could stem from increased confidence in residual values, enhanced battery health, or government-driven initiatives to bolster demand. 

Baseline scenario

In the baseline scenario, a slow resurgence unfolds as economic factors maintain inflation at higher-than-ideal levels. At the same time, new vehicle production gradually recovers amid growing EV adoption. 

• The broader economy remains characterised by unresolved conditions, with no significant deterioration observed. Long-term recovery plans and forecasts remain feasible, albeit with gradual inflation reduction and stubbornly high interest rates, experiencing only minor yearly declines. 
  
  

• The recovery in new vehicle production stabilises and potentially gains momentum. As EV adoption grows, particularly in the new vehicle market, the return of fleet, rental, and business sector commercial discounts helps ease pressures on the supply of used vehicles. This growth is carefully managed to prevent a significant oversupply that could lead to a sudden crash in vehicle values. 
  
  

• The shift to EVs in the used car market continues slowly. Similar to trends observed in 2023, adopting used EVs shows incremental progress without significant acceleration. 

Downside scenario

In the downside scenario, weakened consumer confidence and economic struggles contribute to a challenging landscape where financing a used vehicle proves prohibitively expensive for many. 

• The economy undergoes a substantial and prolonged downturn, with implemented measures failing to make a significant impact. Persistent high inflation rates persist, with limited prospects for reduction. The Bank of England maintains elevated base rates to counter inflation, further exacerbating economic woes. 
  
  

• Fragile consumer sentiment results in a decrease in demand for used vehicles, leading to a contraction in the used car market. Economic uncertainties prompt consumers to postpone or reconsider purchasing used vehicles, dampening market activity. 
  
  

• Financing rates for used vehicles remain markedly higher than anticipated, rendering used vehicle ownership financially out of reach for a significant number of consumers. This disparity in affordability is particularly pronounced amid a cost-of-living crisis and within an economic landscape characterised by persistent inflation.