The UK used car market is shifting towards older vehicles and battery electric vehicles (BEVs), as a shortage of three- to four-year-old ex-fleet stock continues to affect dealer supply, according to Indicata.
Demand for ex-fleet vehicles is outstripping supply, with fleets extending vehicle contracts contributing to a reduced flow of three- and four-year-old cars into the used market.
Shift in Used Car Market
Indicata’s latest Market Watch analysis shows vehicles aged three to four years accounted for 22.6% of used dealer stock in August 2026, down from 25.5% two years earlier.
The shortage is prompting dealers to rely increasingly on older vehicles to maintain forecourt stock.
Cars aged five years and older now account for 48.9% of all used car stock, compared with 47.9% in August 2024.
Impact on Fleet Decision Makers
For fleet decision makers, the trend highlights the potential impact of longer replacement cycles on the wider used car market, particularly as fleets continue to assess whether extending contracts can help manage vehicle costs and supply constraints.
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At the other end of the market, supply of newer used cars remains comparatively strong.
Vehicles aged two years or less accounted for 25.73% of dealer stock in August, up from 22.70% in 2024, with supply continuing to exceed demand.
Dean Merritt, national retail strategy manager at Indicata, said the reduced supply of three- to four-year-old cars had been “exacerbated by fleets extending contracts to four and five years”.
“Older vehicles are filling that gap, while the stock of sub-24-month-old cars remains strong,” he said.
Growth of Electrified Vehicles
Used BEV demand continues to grow, with BEVs accounting for 7.95% of used dealer stock in August 2026, up from 5.22% two years earlier.
Their share of used car sales has risen even faster, increasing from 5.11% to 8.63%.
Indicata said demand for used BEVs is currently outstripping supply, contributing to a 2.7% increase in used electric vehicle prices during July and August.
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Despite the recent increase, however, used BEV prices remain 21.1% below their 2024 level.
Mild hybrid electric vehicles (MHEVs) have also continued to increase their market share, representing 12.8% of used stock and 12.0% of sales in August.
Diesel, meanwhile, continues to decline, with diesel vehicles accounting for 26.9% of used stock but just 23.1% of sales in August.
Petrol remains the largest fuel type, representing 41.2% of used stock and 43.9% of sales, although its share has gradually declined as buyers increasingly consider electrified alternatives.
They expect the used market to remain characterised by strong supplies of sub-24-month-old vehicles, continued reliance on older stock and further growth in BEV sales through the remainder of 2026.
The shortage of three- to four-year-old vehicles is also expected to persist, potentially keeping pressure on fleets and dealers as vehicle replacement cycles continue to influence the supply of stock into the used market.
