Used Car Market in the UK to grow by USD 35.7 Billion (2024-2028), driven by value for money, AI's impact on market trends - Technavio

NEW YORK, Jan. 27, 2025 /PRNewswire/ -- Report on how AI is redefining market landscape - The used car market in uk size is estimated to grow by USD 35.7 billion from 2024-2028, according to Technavio. The market is estimated to grow at a CAGR of  5.97%  during the forecast period. Excellent value for money proposition of used cars is driving market growth, with a trend towards improved touchpoint management. However, increasing preference for car subscription services  poses a challenge. Key market players include Alibaba Group Holding Ltd., 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 Holdings Inc., Lithia Motors Inc., McCarthy Cars UK Ltd., Motors.co.UK Ltd., Penske Corp., Toyota Motor Corp., and TrueCar Inc..

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Market Driver

The UK used car market is thriving, with popular segments including hatchbacks, sedans, and SUVs. Organized dealerships, including franchised and independent dealers, dominate the scene, offering quality used cars from OEMs and banks. NBFCs and insurance companies also play a significant role. Petrol and diesel vehicles continue to lead, but hybrid, electric, and CNG-powered vehicles are gaining traction. OEMs and auto marketplaces facilitate online sales, while dealership networks expand. Luxury vehicles and secondhand cars are in demand, with residual values influenced by finance charges and emission standards. The average ownership duration is decreasing due to online retailing and car subscription services. The unorganized sector, including individual garages and unorganized dealerships, also exists but is shrinking. The market includes retail models, mid-sized and compact cars, and even off-lease vehicles. Emissions remain a concern, with gasoline-fueled cars and diesel-fueled passenger cars facing scrutiny. The SUV segment, a large category in the offline market, is growing, as is the electric segment with used electric vehicles. Artificial intelligence and machine learning technology are revolutionizing used car management. The telecom industry and online marketplaces are disrupting traditional sales channels. Even luxury car manufacturers are entering the used car market. 

Online used car dealers in the UK are focusing on enhancing their website experience for potential buyers. These sites serve as crucial touchpoints for researching various car models, features, prices, and locations. Many customers spend a significant amount of time investigating before making a purchase. Dealers are implementing user-friendly technologies to gather feedback on their websites. Customized research services are also available on several online used car platforms. To attract and retain customers, it is essential for dealers to create visually appealing and easy-to-navigate websites. This approach ensures a positive buying experience and ultimately, a successful sale. 

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Market Challenges

• The UK used car market is a significant sector, encompassing various segments like Hatchbacks, Sedans, and Sports Utility Vehicles (SUVs). This market is divided into organized and unorganized sectors. Organized players include OEMs, banks, Non-Banking Financial Companies (NBFCs), dealers, insurance companies, and luxury vehicle manufacturers. They offer retail models through dealership networks, online sales channels, and franchises. Petrol, Diesel, Hybrid, Electric, and CNG-powered vehicles are common in the used car market. Residual value, quality finance charges, and emission standards are crucial factors for buyers. Sellers can leverage online marketplaces, auto marketplaces, and car subscription services to reach a larger audience. The unorganized sector includes individual garages and unorganized dealerships. Challenges include ensuring vehicle quality, adhering to emission standards, and offering competitive financing options. The average ownership duration for used cars is relatively low, making the market dynamic and competitive. The petrol and diesel segments dominate, but the electric and hybrid segments are growing rapidly. Artificial intelligence and machine learning technology are transforming used car management. Off-lease vehicles, leasing offices, and car subscription services are emerging trends. Emissions and the shift towards sustainable mobility are key concerns. The SUV and mid-sized segments are popular, while compact cars cater to budget-conscious buyers.
• The car subscription model is an emerging business concept, gaining popularity among consumers seeking flexible transportation solutions without the long-term commitment of owning a single vehicle. This model allows customers to select various vehicle models for a predetermined period and mileage, providing financial relief as they pay only a fraction of the vehicle's cost. By offering this economical alternative, the number of used car buyers may decrease.

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Segment Overview 

This used car market in UK report extensively covers market segmentation by  

1. Channel 
• 1.1 Organized
• 1.2 Unorganized
2. Vehicle Type
• 2.1 Compact car
• 2.2 SUV
• 2.3 Mid size
3. Type 
• 3.1 Petrol
• 3.2 Diesel
• 3.3 Others
4. Geography 
• 4.1 Europe

1.1 Organized-  Used car market in the UK is serviced by various organized vendors, including dealership chains, online marketplaces, and OEM-affiliated dealerships. These vendors ensure a secure transaction for both parties through government tie-ups and clear communication regarding fees and timelines. Additionally, they offer technical assistance and financial support to buyers. Advanced technologies like blockchain are adopted to maintain vehicle history and ownership records, enhancing buyer confidence. For instance, Cars24, an online used car platform, reported that one-third of their April 2022 sales originated from chat support channels. Their chat support includes WhatsApp and an AI chatbot, demonstrating the sector's digitalization and commitment to customer convenience. These features contribute significantly to the growth of the organized used car market in the UK.

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Research Analysis

The used car market in the UK is a vibrant and diverse sector, encompassing a wide range of vehicle types, including Hatchbacks, Sedans, and Sports Utility Vehicles. The market is organized and unorganized, with both franchised dealerships and independent car dealers playing significant roles. Used cars are available in various fuel types, such as Petrol, Diesel, Hybrid, and Electric vehicles. OEMs and banks provide financing options, while leasing offices and car subscription services offer flexible ownership solutions. The average ownership duration is around five years before cars enter the used market. Online sales and auto marketplaces have revolutionized the industry, with telecom companies and other tech giants entering the fray. Residual values and quality finance charges are crucial factors for buyers, making transparency and trust essential. Off-lease vehicles are a popular source of used cars, and the market continues to evolve with the introduction of new technologies and business models.

Market Research Overview

The used car market in the UK is a significant sector, encompassing a wide range of vehicle types, including Hatchbacks, Sedans, and Sports Utility Vehicles (SUVs). This market is organized and unorganized, with various stakeholders playing crucial roles. Petrol and Diesel-fueled passenger cars dominate, but the trend is shifting towards Hybrid, Electric, and CNG-powered vehicles. OEMs, Banks, NBFCs, Dealers, Insurance companies, and Luxury Vehicle manufacturers are key players in the organized segment. The used car market in the UK is vast and diverse, with various segments such as the Passenger cars, SUV, Mid-sized, Compact, and Luxury segments. The market is served through a dealership network, including Franchise and Independent dealers, Leasing offices, Car subscription services, and Individual garages. Online sales channels, including Auto marketplaces, are increasingly popular, with the Telecom industry and Online marketplaces playing a significant role. The residual value of used cars is influenced by factors such as Quality finance charges, Emission standards, and the average ownership duration. The market is regulated by various bodies to ensure fair practices and transparency. The use of Artificial Intelligence and Machine Learning technology is transforming the used car industry, with Off-lease vehicles and Franchises becoming popular retail models. The future of the used car market in the UK is promising, with the Electric segment poised for significant growth.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

• Channel
• Organized
• Unorganized
• Vehicle Type
• Compact Car
• SUV
• Mid Size
• Type
• Petrol
• Diesel
• Others
• Geography
• Europe

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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SOURCE Technavio