2026
9
UK Car Review: 2026
2026-03-02T12:01:53+00:00
REPB7391FA5_3232_4B96_B91F_A53232AB9606
2195
191600
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The UK car market is undergoing significant changes, with a clear shift toward small to medium-sized vehicles.  Used vehicles continue to dominate the landscape with a 79.5% market share, underscoring…
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Automotive
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UK Car Review: 2026

The UK car market is undergoing significant changes, with a clear shift toward small to medium-sized vehicles.

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  1. EXECUTIVE SUMMARY

    • What you need to know
    • Outlook for the UK car market
    • Opportunities
    • Enhance digital presence
    • Prioritise value and quality
    • Graph 1: most important factors when buying a car, 2025
    • Expand electric vehicle offerings
  2. THE MARKET

    • Snapshot – market size and forecast
    • Inflation still strains household budgets
    • Graph 2: CPI inflation rate, 2021-26
    • Consumer confidence outlook
    • Graph 3: consumers’ financial confidence over the next year or so, 2025
    • Fuel prices ease, still above pre-pandemic lows
    • Graph 4: unleaded petrol and diesel pump prices, 2018-26
    • The UK’s EV revolution: new rules, taxes and timelines
    • Car sales hit three-year growth streak in 2025
    • Graph 5: new and used car sales, by volume, 2020-25
    • Market size and forecast of the UK car market
    • Graph 6: market volume forecast for cars (new registrations and used sales), 2019-30
    • Used cars continue to dominate
    • Graph 7: new and used car sales, share of volumes, 2018/25
    • EV market share hits record high as petrol and diesel demand weakens
    • Graph 8: new cars market share, %, 2025
    • Dealers still dominate: unpacking car buying trends
    • Graph 9: where last car was purchased – top three channels, 2025
    • Graph 10: where last car was purchased – online options, 2024-25
    • Volkswagen pulls ahead of the pack
    • Graph 11: brand share, new cars – leading 10 brands, 2024 and 2025
  3. THE CONSUMER

    • Type of vehicle owned
    • Size matters: medium and small cars dominate the road
    • Mid-sized marvels: the new kings of the road
    • Graph 12: type of car owned, 2024 vs 2025
    • Stylish and affordable: smaller cars most popular with women
    • Graph 13: small saloon/hatchback car ownership, by gender and select age, 2025
    • Important factors when choosing a car
    • Price and quality: how consumers prioritise essentials
    • Price and quality: the driving factors in car buying decisions
    • Graph 14: most important factors when buying a car, 2024 vs 2025
    • Building trust and driving change: how car brands can win over savvy consumers
    • Meeting high expectations: why quality drives car purchases
    • Fuel efficiency: saving money and the planet
    • Graph 15: most important factors when buying a car – fuel efficiency, by age, 2025
    • Driving fun: the road to customer happiness
    • Ways of accessing a car
    • Purchase and outright ownership reign supreme
    • Purchase and outright car ownership still rule
    • Leasing gains popularity
    • Graph 16: ways of accessing a car – fixed-term lease (ie pay monthly with option to purchase or return car at end of lease term), by age, 2025
    • Alternative options are a bigger hit with younger consumers
    • Graph 17: select ways of accessing a car, by age, 2025
    • Preferred methods for communication
    • Digital and social media are the most popular mediums for information
    • Digital leads
    • Young cohort relies on social media for information about cars
    • Graph 18: social media as a preferred method of communication, by age, 2025
    • Driving impact: how car brands can maximise TV advertising in the digital age
    • Winning print advertising strategies for car brands to build trust
    • Interest in specific in-vehicle technologies
    • Consumers demand a variety of enhanced vehicle features
    • Consumers increasingly seek technological features that enhance safety, simplify diagnostics and offer intuitive control over in-car functions
    • Graph 19: interest in select enhanced vehicle features, 2025
    • Driving smarter: why safety features are the future of cars
    • Balancing convenience and safety in digital car interfaces
    • Graph 20: interest in digital screens for in-car functions, by age, 2025
    • Navigating the future: are self-driving cars ready to take the wheel?
  4. ADVERTISING AND MARKETING ACTIVITY

    • Car manufacturers ease off ad spend…
    • Graph 21: total advertising expenditure on cars, 2021-25*
    • …while dual-purpose cars maintain market grip
    • Graph 22: total advertising expenditure on cars, by category, 2025*
    • The shifting gears of car advertising
    • Graph 23: total advertising expenditure on cars, by media, 2023 and 2025*
    • Renault Austral promotes innovate technology with its E-Tech self-charging full hybrid
    • The Audi A6 Avant e-tron showcases its customisable features
    • Hyundai’s ‘Power your world’ campaign showcases the technological advancements of the fully electric IONIQ 9
    • Volkswagen highlights its luxurious comfort, and the long range of its electric vehicle for a road trip from the UK to Amsterdam
    • Dacia’s minimalist EV aims to make EVs more affordable and accessible
    • BMW builds on its legacy by linking its iconic heritage to modern innovation
  5. APPENDIX

    • Market definitions and exclusions
    • Data sources
    • The market
    • Forecast methodology
    • Forecast methodology – fan chart
    • Market forecast and prediction intervals (volume)
    • How top car brands invested big in advertising
    • The consumer
    • Consumer research questions
    • Consumer research methodology – EMEA
    • Other data source methodologies
    • Nielsen Ad Intel coverage
    • Abbreviations and terms
Download Report Summary

"As mid-sized and small cars stay popular, buyers seek value, quality, and fuel efficiency. Digital marketing is now the best way for brands to showcase these benefits."

Utku Tansel, Senior Retail Analyst

Utku Tansel, Senior Retail Analyst

The UK car market is undergoing significant changes, with a clear shift toward small to medium-sized vehicles.  Used vehicles continue to dominate the landscape with a 79.5% market share, underscoring a prevailing consumer focus on value; driven by consumer confidence which remains split, influencing big-ticket purchases like cars. B-EVs reach a record 23.4% share, supported by government incentives and shifting consumer priorities, particularly in the face of ongoing inflation.

Affordability (51%) and quality (49%) remain the top factors influencing purchase decisions. This creates a significant opportunity for “affordable electrification,” particularly within the finance and used-EV sectors. Traditional car ownership is still the preferred choice for 65% of consumers, while leasing is up to 40% among 17-34s.

Government ZEV mandate and tax changes are the biggest industry-wide disruptors. Pay-per-mile taxation and supply-chain strain are the biggest threats that could slow EV momentum.

Safety features are a high priority for buyers, with 77% seeking cars equipped with safety assist technology, while 47% express interest in autonomous driving features.

Digital platforms have emerged as powerful channels for car brands to convey value propositions effectively, with social media playing a pivotal role in reaching younger demographics.

This Report Looks at the Following Areas:

  • Emerging opportunities driven by the increasing demand for small and medium-sized cars
  • Key factors influencing car purchasing decisions, including price, quality, fuel efficiency, driving experience, brand reputation, safety features, environmental sustainability, and innovation
  • Strategic recommendations for market success, addressing ownership preferences such as outright purchases, leasing, short-term rentals, car sharing, and car club memberships
  • Comprehensive analysis of communication channels, from digital platforms to traditional mediums like TV, print, and outdoor advertising, highlighting the most effective strategies for maximising audience engagement
  • Insights into the rapid growth of the electric and hybrid car market, exploring evolving government policies, incentives, recent developments, and their wider implications for the industry

Market Definitions

This Report investigates the changing face of the UK car market. It focuses on developments that are taking place within the car market and how these are impacting now and are likely to impact on the future demands of buyers. It presents a review of the UK market for passenger vehicles and the dynamics of the sector, as well as reviewing trends in areas such as category and brand share.

It is exclusively focused on passenger vehicles, and therefore excludes any discussion of the market for light commercial vehicles.

This Report specifically excludessales to businesses or operators of company car fleets although data for sales to all three markets is included where necessary.

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