Used Car Market Analysis UK - Size and Forecast 2024-2028

UK Used Car Market Size 2024-2028 

The UK used car market size is estimated to grow by USD 35.7 billion at a CAGR of 5.97% between 2023 and 2028. The market is thriving due to several key factors. Firstly, the excellent value-for-money proposition offered by used cars attracts buyers seeking affordability without compromising quality. This appeal is further bolstered by the reduced ownership cycle of cars, as consumers opt for more frequent upgrades to newer models, thereby increasing the availability of pre-owned vehicles. Additionally, the rapid pace of technological innovations in passenger cars contributes to the attractiveness of used cars, as buyers can access advanced features and amenities at a fraction of the cost compared to new vehicles. These three factors collectively drive the growth of the market, offering consumers a wide range of options while accommodating their budgetary constraints and desire for modern automotive technology.

What will be the size of the Market During the Forecast Period?

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By Channel

The organized segment segment is estimated to witness significant growth during the forecast period. Organized used car sellers include dealer chains, online marketplaces, and dealers affiliated with original equipment manufacturers (OEMs). Many organized sellers offer technical expertise as well as financial assistance to customers looking for used cars. These market players are more adept at digitizing to create a seamless interface. These characteristics of organized sellers will drive used car sales during the forecast period. 

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The organized segment was the largest segment and was valued at USD 73.90 billion in 2018. Several organized suppliers are also enforcing advanced technologies such as blockchain to store and maintain details of vehicle ownership, spare parts replacement history, and service. The adoption of these modern technologies, including AI and blockchain, is driving the growth of the organized segment of the market over the forecast period.

Market Dynamics and Customer Landscape

The used car market is a significant sector in the automobile industry, encompassing various segments such as Hatchbacks, Sedans, Sports Utility Vehicles (SUVs), and Luxury Vehicles. This market can be categorized into organized and unorganized sectors. Organized sector includes dealership networks, OEMs, banks, NBFCs, and insurance companies. In contrast, the unorganized sector consists of independent dealers and retail models. Petrol, Diesel, Hybrid vehicles, Electric vehicles, and CNG-powered vehicles are the primary fuel types in the used car market. The market for used passenger cars is substantial, with a focus on used car management and maintaining quality. The dealership network plays a crucial role in the used car market, with franchise dealers and independent dealers contributing significantly. Online sales channels, such as auto marketplaces, have gained popularity in recent years, providing convenience and accessibility to buyers. Automobile manufacturers also play a role in the used car market by offering certified pre-owned vehicles and extended warranties. Emission standards and fuel efficiency are essential factors influencing the demand for used cars, with a shift towards gasoline-fueled cars and diesel-fueled passenger cars giving way to electric and hybrid vehicles in the SUV segment. Residual value, quality finance charges, and seller incentives are essential considerations for buyers in the used car market. The market for used electric vehicles is growing, with an increasing number of consumers opting for sustainable transportation solutions. The used car market is a dynamic and evolving sector, with continuous changes in consumer preferences, technology, and regulations.

Key Market Driver

The primary driver behind the growth of the market is the exceptional value proposition offered by used cars. With an increasing number of car manufacturers venturing into the pre-owned vehicle sector and a rising number of online dealerships, customer perceptions regarding the availability of used cars have improved significantly. Customers opt for used cars over new ones primarily due to their affordability. Consequently, to instill trust among customers, many used car dealerships provide supplementary services. For instance, dealerships offer extended warranties, enabling free servicing at the dealership for a specific period post-purchase. Additional amenities like roadside assistance or towing services further enhance the customer experience, fostering certified used cars market growth during the forecast period.

Significant Market Trends

Enhanced touchpoint management emerges as the key trend driving market expansion. Automakers and used car dealerships operating online platforms increasingly employ touchpoint management technology to gather feedback on website usability. These online platforms serve as the primary interface for potential buyers seeking vehicle details, including models, features, pricing, and locations. Moreover, businesses utilize various digital channels such as mobile apps, review platforms, social media, and customer databases to gather feedback and insights. This integrated approach to touchpoint management is expected to propel market growth in the forecast period, catering to the diverse needs of buyers seeking pre-owned vehicles.

Major Market Challenge

Increasing preference for car subscription services is a challenge that affects the growth of the market. The car subscription model is a growing business model, mainly preferred by those choosing a personal mode of transportation. Subscribing a car mainly reduces pressure on the buyer's finances because they only have to pay a portion of the cost of the car. Additionally, buyers can choose another car model at the end of the subscription period.

Moreover, the car subscription business model includes all costs associated with maintenance, vehicle insurance, and periodic maintenance costs as part of the monthly subscription fee. Various car manufacturers have rolled out car subscription business models in major cities across the UK. Therefore, the growing preference due to such factors towards car subscriptions will impede the growth of the market during the forecast period.

Customer Landscape

The market research and growth report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Customer Landscape

Who are the Major UK Used Car Market Companies?

Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.

• Alibaba Group Holding Ltd.: The company offers used cars with warranty and customized wraps as well as second hand EV electric cars

The market growth analysis report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:

• Aramis Group
• Arnold Clark Automobiles Ltd.
• Auto Trader Group Plc
• Bauer Media Group
• Car Giant Ltd.
• Carcraft.co.UK
• CarGurus Inc.
• CarMax Inc.
• Cazoo Ltd.
• Cinch Cars Ltd.
• Constellation Automotive Group Ltd.
• Group 1 Automotive Inc.
• Hertz Global Holdings Inc.
• Lithia Motors Inc.
• McCarthy Cars UK Ltd.
• Penske Corp.
• Toyota Motor Corp.
• TrueCar Inc.
• Motors.co.UK Ltd.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Market Analyst Overview

The market offers a diverse array of options, including secondhand automobiles, previously owned cars, certified used cars, and more. With a wide selection of pre-loved vehicles, recycled autos, and refurbished cars, buyers have ample choices to suit their preferences and budgets. Whether seeking certified pre-owned trucks, resale vans, or pre-loved SUVs, consumers benefit from the variety and affordability of the market. From secondhand autos to pre-owned vans and previously owned SUVs, the US used car market caters to diverse needs while providing quality vehicles for discerning buyers. Certified pre-owned trucks, resale vans, and pre-loved SUVs add to the extensive range, ensuring that every buyer finds their ideal match.

The UK's used car market continues to thrive, with secondhand cars remaining a popular and affordable option for many consumers. Online sales channels have significantly impacted the industry, allowing buyers to browse and purchase certified used vehicles from the comfort of their homes. Franchised dealers play a crucial role in the market, offering certified used programs that guarantee the quality and reliability of their vehicles. In the electric segment, used cars are gaining traction due to their environmental benefits and lower upfront costs compared to new electric vehicles. The petrol segment still dominates the market, with midsized cars and compact cars being the most popular choices among buyers. Diesel vehicles, however, face increasing scrutiny due to emissions concerns, leading to a decline in sales. As the market evolves, it's essential to keep an eye on emerging trends and consumer preferences. The shift towards electric vehicles is expected to continue, with more consumers opting for used electric cars as an affordable alternative to new models. In conclusion, the UK's used car market remains a vibrant and dynamic sector, with various segments, including the electric segment, petrol segment, diesel vehicles, midsized cars, and compact cars, offering numerous options for consumers. Online sales channels and certified used programs provide added convenience and peace of mind for buyers, making the process of purchasing a used car more accessible and efficient than ever before.

The used car market is a significant segment of the automobile industry, encompassing the sale of second-hand hatchbacks, sedans, sports utility vehicles (SUVs), and other passenger cars. This market can be broadly categorized into organized and unorganized sectors. Organized market players include OEMs, banks, dealership networks, leasing offices, franchises, car dealers, and car subscription services. These entities follow established processes for used car management, ensuring quality and transparency. On the other hand, the unorganized sector involves individual sellers and small-scale dealers. The market for used cars is fueled by the demand for affordable vehicles and the increasing popularity of petrol, diesel, hybrid vehicles, and electric cars. The average ownership duration for used cars is decreasing, leading to a steady supply of off-lease vehicles. The used car market is evolving rapidly, with the emergence of online sales through auto marketplaces and telecom industry partnerships. This shift is transforming the way used cars are bought and sold, offering convenience and transparency to consumers. However, factors like residual value and quality finance charges continue to influence the market dynamics. Overall, the used car market is an essential component of the automobile industry, contributing significantly to its growth and development.

Segment Overview

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD Billion " for the period 2024-2028, as well as historical data from 2018 - 2022 for the following segments.

• Channel Outlook 
  • Organized
  • Unorganized

• Vehicle Type Outlook 
  • Compact car
  • SUV
  • Mid size

• Type Outlook 
  • Petrol
  • Diesel
  • Others 

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What are the Key Data Covered in this Market Research Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting of the market between 2024 and 2028
• Precise estimation of the size of the market size and its contribution to the parent market
• Accurate predictions about upcoming market trends and analysis and changes in consumer behavior
• Growth of the market industry across Europe, North America, APAC, South America, and Middle East and Africa
• Thorough market growth analysis of the market’s competitive landscape and detailed information about companies
• Comprehensive market analysis and report on the factors that will challenge the market research and growth of market companies

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