Used Car Market Trends: Prices and Inventory Changes in 2026

Used car prices have been all over the map since 2022, but 2026 is showing a clear shift. If you’ve been waiting to buy a used car, the market is finally starting to feel more normal - not perfect, but predictable. Inventory is climbing back up, and prices are dropping in ways we haven’t seen since before the pandemic. This isn’t just a small dip. It’s a real turning point.

Inventory is rising - and it’s not a fluke

Back in 2022, used car lots were nearly empty. Dealers couldn’t keep anything on the lot. Now, in early 2026, the number of used vehicles available in the UK is up nearly 22% compared to the same time last year. Why? Because new car production has stabilized, and lease returns are flooding the market. More people are trading in their three-year-old leases, and manufacturers are producing more vehicles than they did during the chip shortage years.

For buyers, this means more choices. You’re no longer stuck picking between three overpriced 2020 models. Dealers are now offering 2021, 2022, and even 2023 models with low mileage - and they’re willing to negotiate. In Bristol, dealerships are reporting a 30% increase in foot traffic since December. People are walking in, comparing options, and walking out with better deals.

Prices are falling - but not everywhere

On average, used car prices across the UK are down 8.5% year-over-year. That’s not a tiny drop. That’s hundreds, sometimes over a thousand pounds, off the price tag. A 2021 Ford Focus that sold for £16,500 last year now sits at £15,100. A 2022 Volkswagen Golf? £17,800 down to £16,200.

But here’s the catch: not all cars are dropping equally. Compact SUVs and electric vehicles are holding their value better. The Toyota Corolla Cross and Hyundai Kona Electric are still seeing prices stay flat or even rise slightly in some regions. Why? Because demand for practical, fuel-efficient vehicles hasn’t faded - it’s just shifted. People still need to get around, and they’re not ready to pay premium prices for gas-guzzlers.

On the other end, large sedans and older diesel models are falling fastest. A 2018 BMW 5 Series? Down 14%. A 2017 Skoda Octavia diesel? Down 19%. Buyers are moving away from models that are expensive to maintain and don’t fit modern lifestyles.

What’s driving the changes?

It’s not one thing - it’s a mix. First, interest rates have stabilized. After peaking at 5.25% in late 2023, the Bank of England has held rates steady at 4.5% since mid-2025. That’s made monthly payments more manageable, so more people are financing used cars again.

Second, inflation has cooled. Fuel prices are down 18% from their 2023 highs. Insurance costs are easing. Even MOTs and servicing are cheaper than they were two years ago. All of this means owning a used car feels less like a financial burden.

Third, the used car market is becoming more transparent. Online platforms like Autotrader and Cazoo now show real-time inventory and price trends. Buyers can see exactly how prices have changed over the last 90 days. That’s putting pressure on dealers to be fair. No more hiding behind vague "market conditions" excuses.

When to buy - and when to wait

If you’re looking to buy a used car in early 2026, here’s the smart move: start shopping now. February and March are historically the best months to buy. Dealers are trying to clear out last year’s inventory before new models arrive. You’ll find more incentives - free servicing, extended warranties, or even cashback offers.

But if you’re holding out for a 2023 or newer EV, wait until April. That’s when the biggest wave of lease returns hits the market. Dealers will be desperate to move them, and prices could drop another 5-8%.

One warning: don’t fall for "low mileage" traps. Some sellers are advertising 2021 models with 30,000 miles as "practically new." But those cars were driven hard during the pandemic - think long commutes, constant use. Check the service history. A 2021 car with 50,000 miles and full service records is often a better buy than a 2021 with 32,000 miles and no oil changes.

What’s next? The next 12 months

By the end of 2026, we’ll likely see used car prices drop another 5-7%. Inventory will keep growing, especially for EVs and hybrid models. The UK government’s push to phase out petrol and diesel cars by 2030 is already reshaping demand. More people are looking at 2022-2024 hybrids as a bridge to full electric.

Dealers are also changing how they sell. Many are offering fixed-price, no-haggle deals online. Some even let you test drive at home. The old-school car lot is fading. The future is digital, transparent, and buyer-friendly.

What to look for in a used car today

• Service history: Always ask for full records. A car with regular oil changes and brake checks is worth more - even with higher mileage.
• EV range: If you’re considering an electric car, make sure it has at least 200 miles of real-world range. Older models like the Nissan Leaf 2018 only do 130 miles on a full charge.
• Warranty: Look for dealers offering at least 6 months of warranty. Some now offer up to 12 months on certified used cars.
• Depreciation rate: Cars like the Toyota Corolla, Honda Civic, and Skoda Octavia hold their value best. Avoid models with high repair costs - like older Audis or BMWs.

Final thoughts

The used car market in 2026 isn’t perfect, but it’s fairer than it’s been in years. Prices are falling, inventory is growing, and buyers have more power than they’ve had since 2019. You don’t need to rush. You don’t need to panic. Just be smart. Check the history. Compare prices. Wait for the right deal. The market is working for you now - not against you.