An Outlook to 2026 for UK Dealers and Brokers

2025 in Review 

2025 was a year of strength and change for the UK motor trade. Emerging Chinese brands such as BYD and Jaecoo made gains in market share with a record number of new car registrations, improving choice for consumers. However, demand for used cars also remained strong, with combined new and used car transactions reaching around 9.8 million, the highest since 2019. 

The market held up well, but there were still some pressures. Vehicle repair costs went up, and while insurance premiums decreased slightly, the total cost of owning a car was still a key consideration for consumers and a reminder that the market can still be unpredictable. 

Market Size and Sales Projections for 2026 

Looking ahead, the UK car market is finally expected to return to pre-pandemic strength this year, with total transactions projected to reach 10 million. Of these 10 million, used car sales are expected to grow by approximately 3%, reaching around 8.2 million, while new car sales are projected to see growth of 1–2%, hitting roughly 2.035 million. 

The Strength of the Used Car Market 

The above prediction shows a market that is stabilising, with used vehicles driving much of the activity. With the used car market set to stay strong in 2026, this means there’s an opportunity for dealers to plan stock strategically and focus on what’s selling well. 

In addition, there are more vehicles initially sold in the past few years coming back into stock, particularly in the 3–5-year-old range. This is due to cars registered in 2023 now reaching this age range, according to the 2026 Autotrader Outlook. So, dealers can refresh inventory and attract consumers who want good value and reliability.  

A dealer’s success in this area depends on how confident consumers are. According to the Startline Used Car Tracker, 57% of dealers say higher consumer confidence would be the biggest boost for the market in 2026, and 52% believe better access to motor finance would help used car sales grow. 

Evolving Competition and Consumer Expectations 

Growing international brands are expanding in the UK, challenging established brands and increasing choice for consumers. According to figures published by SMMT, BYD achieved 51,422 registrations in the UK during 2025, a 485% increase compared to 2024, capturing 2.5% of market share. Jaecoo also saw a huge jump, with 28,232 registrations, over a 13,400% increase. 

Digital retailing remains key. More consumers are shopping for cars online, expecting quick responses and a stress-free process from start to finish. Around 74% of UK buyers expect to use some sort of online process when buying their next car, including delivery options. Whilst nearly 60% say convenience motivates them to use online tools when progressing their purchase. 

Not only is digital retailing key, but it’s also what customers expect, and dealers using these channels will be well-placed to boost sales and increase demand. 

Insurance Market Outlook 

Premiums rose to historic highs in late 2023 but have dropped every year since. After a few years of falling premiums, costs are expected to rise in 2026 by an average of 3%, or roughly £15 per policy.  

For dealers and brokers, understanding these trends is important because consumers are paying more attention to the total cost of owning a car, including insurance. A way dealers can make this more manageable is by offering premium funding options, which will spread the cost over time and give consumers greater flexibility. Being able to explain these options and offer guidance will go a long way towards success. 

Looking Ahead: In Summary 

2026 is shaping up to be an exciting year for the UK motor trade. Dealers who stay on top of market trends, stock the right brands, embrace digital retailing and guide customer through ownership costs will be ahead of the game. By focusing on the consumer and staying adaptable, particularly with varied finance options, challenges can quickly become opportunities.