UK Used Car Prices Rise in January 2026: What's Driving the 0.9% Increase?

The UK used car market enjoyed a robust start to 2026, with a notable surge in retail prices driven by heightened consumer demand, providing dealers with a welcome boost after a subdued end to the previous year.

A Strong Start to the Year

Data from Percayso Vehicle Intelligence, published early by Car Dealer, reveals that average retail values for three-year-old cars increased by 0.9% in January, equating to a rise of approximately £180. This upward movement effectively reverses the price declines seen at the close of 2025, where values fell by 0.6% in November and just over 1% in December.

Pent-Up Demand Fuels January Activity

Speaking on Car Dealer Live, automotive consultant Derren Martin highlighted the positive start to the new year. He noted that January is traditionally one of the busiest months for car dealers, who actively stock up to meet renewed consumer interest. Martin attributed this to a combination of necessity buying and a release of pent-up demand following the quieter winter period. "People aren’t out buying cars in November onwards," he explained. "Once we get out over Christmas, people go out and buy cars."

This demand translated into price increases across nearly all age brackets, with Martin observing that dealers were "pushing those prices up a little bit." Even one-year-old cars, a segment often sensitive to pre-registration activity and new car discounts, saw an average gain of 1.5%, or around £450, indicative of a healthy market.

Diesel and Hybrid Models Lead Fuel-Type Growth

Analysing the market by fuel type reveals distinct trends. Diesel models recorded the strongest increase, with values rising by almost 2% in January. Martin pointed to scarcity as a key driver, given the reduction in new diesel car production, coupled with sustained demand from rural and long-distance drivers.

Hybrid vehicles followed closely with a 1.4% increase, while petrol cars saw a more modest 0.8% rise. Notably, the electric vehicle (EV) market, which experienced a 2% decline in December, showed signs of stabilisation. While it was the only fuel type not to record an increase, the marginal 0.1% decline suggests the sector may be beginning to level out after a period of volatility.

Audi and Kia Stand Out Among Brands

At a brand level, Audi was the standout performer for three-year-old values, which increased by 2.2% in January. Kia followed with a strong 1.8% gain, while BMW, Skoda, Toyota, and Vauxhall all recorded increases of 1% or more. Land Rover also showed signs of recovery, posting a modest 0.4% gain after a challenging final quarter in 2025.

What’s Next for the Used Car Market?

Looking ahead, the positive momentum is expected to continue. Martin suggested that February often outperforms January in terms of price growth. This sets the stage for further opportunities for dealers to enhance margins as demand builds towards the key spring plate-change season, a period that typically sees heightened market activity.