The UK used car market continues to outpace its European counterparts, according to the latest Indicata Market Watch Report.

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Used vehicle values remain broadly stable while several key European markets are experiencing more significant price declines.

Indicata’s latest analysis of Europe’s used car sector reveals increasing stock levels and slowing vehicle rotation are creating pressure across the continent, while the UK is proving more resilient than many neighbouring markets. UK used prices are just 0.2 percentage points below January 2020 levels, placing Britain among the strongest performing used markets in Europe.

Across Europe, the average used car retail price index has fallen by 1.1 percentage points compared with January 2020, with countries including Finland (-13.9pp), Switzerland (-13.7pp), Denmark (-7.4pp), Norway (-6.6pp) and Sweden (-3.9pp) experiencing much steeper declines. Only Spain (+9.5pp), Italy (+7.9pp), Poland (+7.8pp), Germany (+4.3pp), the Netherlands (+2.0pp) and Portugal (+1.7pp) are currently outperforming the UK.

The report highlights that Europe is entering a period of increasing market pressure as vehicle stocks build and sales activity slows. Vehicles aged two years or less now account for almost 40% of available stock across Europe, but generate only around 30% of sales, creating a supply-demand imbalance that could place downward pressure on residual values in the coming months across all used markets.

Dean Merritt, Indicata UK’s national retail strategy manager

The report also shows battery electric vehicles (BEVs) continuing to outperform their share of market supply across Europe, accounting for 10.66% of sales compared with 8.86% of stock. The exceptional levels of demand seen earlier in the year have started to moderate as BEV stock levels increase but are likely to remain strong while the USA–Iran conflict is keeping ICE fuel prices high.

Despite these wider European challenges, the UK market continues to benefit from healthy consumer demand. The UK’s most popular used vehicles aged up to four years include the Nissan Qashqai, Ford Puma and Kia Sportage, while the Honda e:Ny1, Mercedes-Benz EQC and Renault Symbioz are among the fastest-selling nearly new models.

Dean Merritt, Indicata UK’s national retail strategy manager, said: “The UK market remains in a comparatively strong position against much of Europe supported by strong underlying consumer demand. Although we’re seeing the same trend of rising stock levels and slower vehicle rotation from the Continent, used vehicle values in the UK have held up exceptionally well.”

But Merritt stressed that the rise in nearly new vehicle volumes could place pressure on residual values (RVs) in the coming months within both the UK and European markets.

“If supply continues to outpace retail demand, particularly in the youngest age bands, pricing pressure is likely to emerge in that segment first before potentially widening across the broader market.”

The Indicata report concludes that while Europe is not yet experiencing a broad collapse in used vehicle values, asset owners need to keep an eye on Market Days’ Supply rising across most fuel types, against a backdrop of stock levels increasing and nearly new used vehicles accumulating faster than they are selling.

If these trends persist beyond normal seasonal fluctuations, used vehicle values could come under pressure during 2027.