Predicted Rise in Used Car Prices in 2025 Due to Covid-Impacted Market: Expert Insights and Trends

Are you in the market for a used car? If so, you may want to act fast before prices start to rise. According to industry experts, used car prices are predicted to increase in 2025 due to a shortage of vehicles entering the market.

The impact of the Covid-affected 2022, where only 1.61 million new cars were registered, has created a shortfall of between 500,000 and 700,000 used cars compared to pre-Covid levels. This shortage is expected to drive up prices as demand exceeds supply.

In the last quarter of 2024, the used car market saw an unseasonal rise in prices for all fuel types. Petrol cars, hybrids, electric vehicles (EVs), and diesel cars all experienced price increases, with petrol remaining the dominant fuel type in online sales.

Neil Frost, Autorola UK’s country manager, predicts that this trend of rising prices will continue throughout 2025 and into 2026. He attributes this to the strong competition for used stock in the wholesale market, which will translate into higher retail prices for consumers.

Auto Trader reports that the average price of a used car in December was £16,649, down slightly from the previous month. However, year-on-year pricing was down 4.1%, the smallest drop seen in 2024, indicating a positive trend as we move into 2025.

Despite the overall decrease in prices, there are pockets of strength in certain vehicle cohorts with strong demand and limited supply. EVs, in particular, continue to be the fastest-selling fuel type, with three-to-five-year-old EVs selling within 24 days on average.

Richard Walker, Auto Trader’s data and insights director, highlights the opportunities for profit in the used car market. He advises dealers to optimize their pricing strategy for speed of turn with margin maximization as a priority to unlock success in 2025.

As we enter the new year, it’s clear that the used car market is evolving. With prices on the rise and demand remaining strong, now may be the time to make your move before it’s too late. Keep an eye on market trends and be prepared to act quickly to secure the best deal on your next used car purchase.