CarMoney, one of the UK’s fastest-growing automotive lenders, recorded an 18 per cent rise in the volume of loans written in December compared with the same month in 2024. The increase followed the Budget and points to pent-up demand that had been sitting on the sidelines.
Car dealers may have been handed an early boost for 2026, but the picture is one of resilience rather than a full-blown rebound, with motorists adapting to a more challenging economic climate rather than stepping away altogether.
Alistair Grier, CEO of CarMoney, said, “What we saw in December was a clear spike in demand following the Budget. It underlines the level of latent demand in the market. Even with ongoing economic pressures, the signals we are seeing suggest a positive start to 2026 for dealers.”
His comments come amid ongoing macroeconomic headwinds. Interest rates remain elevated, household budgets are stretched and confidence, while improving, is still fragile. But for many consumers, the need for a car has not gone away. Outside major cities in particular, car ownership remains a necessity rather than a luxury.
The UK used-car market entered the new year with solid momentum, following a resilient performance throughout 2025. According to Autotrader, the year ended with an estimated 7.8 million used car transactions, with retail sales on the platform up 2 per cent compared with 2024. December alone delivered a year-on-year uplift in sales volumes of around 4 per cent.
Look beneath the headline numbers, however, and the market remains finely balanced. Supply constraints continue to distort the landscape, with a shortfall of around 1.8 million three to five-year-old cars compared with 2019.
Competition for stock remains intense, shifting the balance of power among retailers. Independent dealers were the clear beneficiaries in 2025, growing their share of one to five-year-old cars, while franchised retailers saw their share slip from 70 per cent in 2024 to 68 per cent.
Franchised sales were broadly flat over the year, down 0.5 per cent, while independents grew by around 4 per cent. Much of that growth has been driven by particularly healthy demand at the lower-priced end of the used car market, as buyers seek to manage affordability by trading down rather than opting out.
All of this underpins forecasts for a further 3 per cent rise in used car sales in 2026, taking the total close to 8 million transactions.
Alistair Grier concluded: “The message for the trade is clear. The market is not immune to economic pressure, but demand remains resilient, particularly at the affordable end, and the year has begun with cautious but genuine momentum.”
Backed by the Peter Vardy Group, CarMoney has ambitious growth plans to reach £730 million in annual vehicle finance by 2029. The target underscores the company’s confidence in its dealer-led, tech-enabled model at a time when the UK’s used car finance market is undergoing rapid structural change.