February used car market on the rise in 2025

FOLLOWING promising signs in January, the used car market experienced its first upward movement of 2025 a month later with a marginal 0.4% (£40) increase at the crucial three-year, 60,000-mile benchmark, according to the latest data from used car valuation experts cap hpi.

This positive shift, driven by a robust retail sector, marks a turning point after a period of stability, with consistent high conversion rates observed across the wholesale market, said cap hpi..

Wholesale strength and retail demand fuel uptick

Conversion rates remained strong throughout February, averaging between 70% and 80%, with some vendors, particularly in fleet sales, achieving 100% conversions. Dealer and part-exchange sales also performed strongly, indicating sustained buyer engagement. Car supermarkets, independent retailers, and franchise dealers all maintained high activity levels, a positive sign for the season.

“The ongoing uncertainty in the new car market, especially with subdued private registrations, is prompting franchised retailers to expand their used car operations. This increased competition for vehicles in wholesale channels has exerted upward pressure on values, slightly exceeding seasonal norms.”

Chris Plumb, Head of Current Car Valuation at cap hpi Tweet

Plumb further noted the market’s focus on price-sensitive stock, with vehicles offering attractive upfront costs or lower monthly finance payments seeing the most significant gains.

Price band analysis shows strong performance in lower segments

The most substantial percentage increases were observed in vehicles priced up to £5,000, which rose by 1.8% (£60), followed by a 1.3% (£90) increase for those between £5,000 and £10,000, and a 0.7% (£85) increase for models in the £10,000 to £15,000 range. Higher price bands saw more modest gains, with vehicles between £30,000 and £50,000 remaining stable and those over £50,000 experiencing a slight decline.

EV market faces continued pressure

While overall used car values saw an uptick, the used EV market continued to face challenges. Despite record month-on-month and year-on-year increases in wholesale volumes, rising supply and competitive new car offers are putting pressure on values, believes Plumb. Used EV values declined across all age and mileage profiles, with five-year-old EVs witnessed the steepest drop at 2.2% (£400).

“In many cases, the monthly PCP payment on a brand-new EV remains lower than that of a used model, limiting the demand for younger second-hand examples,” Plumb explained.

Looking ahead: increased volumes and competitive new car deals

With the arrival of the new ‘25’ plate in March, Plumb reckoned that increased volumes in the used car market were to be anticipated, as fleet returns and part-exchanges filtered through. OEMS were also offering competitive new car deals, particularly on EVs, as they aim to increase market share and meet VETS targets.

“Any impact on used values is unlikely to be felt until April at the earliest, and even then, any downward pressure is expected to be moderate,” Plumb concluded.