Recent tax changes introduced in the Autumn Budget have led to a measurable decline in second-hand car sales across the United Kingdom, according to fresh market analysis. The adjustments, which include new measures affecting electric vehicles alongside modifications to existing car taxes, appear to have prompted a wave of short-term consumer caution.
Immediate Market Impact Post-Budget
The research indicates that sales of used petrol, diesel, electric, and hybrid models all experienced a downturn in the days following the fiscal announcement. One industry expert highlighted that the revelation concerning potential pay-per-mile taxation had a "noticeable impact" on market activity.
Data shows that prior to the Budget, daily sales in the used car market reached approximately 598 vehicles. However, within just ten days of the tax changes taking effect, daily sales of electric vehicles alone dropped to 540, representing a decrease of 9.70 percent. This trend was observed across other fuel types as well, albeit to a varying extent.
Expert Analysis of the Sales Slowdown
Alastair Campbell from Marketcheck UK commented on the findings, stating: "Our data shows that used car sales slowed marginally across all fuel types following the Budget, with electric and hybrid vehicles seeing the most noticeable dip. While the decline isn't dramatic, it suggests a degree of short-term caution in the market. This has been starker in alternative fuel segments, which may be more sensitive to tax or incentive signals from changing Government policy."
The Autumn Budget, delivered by Chancellor Rachel Reeves, implemented several key motoring-related measures. Notably, it introduced a new eVED (Electric Vehicle Excise Duty) for electric vehicles, set at a rate of 3p per mile. Concurrently, the government chose to freeze the existing 5p fuel duty cut for petrol and diesel, a decision that offers temporary relief at the pump for drivers.
Policy Context and Long-Term Strategy
Official Treasury documents provided rationale for the new tax framework, explaining: "Today, drivers of petrol and diesel vehicles pay tax on how much they drive through fuel duty at the pump, while drivers of electric vehicles currently make no equivalent contribution. If we do nothing, then by 2030, around one in five car drivers are expected to pay no fuel duty at all, while other motorists will continue to contribute an average of £480 a year."
The Treasury emphasised its commitment to a balanced transition, adding: "The Government is firmly committed to supporting a successful transition. This is key to supporting UK automotive manufacturers and to meeting our net zero goals. Therefore, the Government will reinvest the majority of the money raised in the early years of the tax into specific measures to help consumers choose EVs and to bolster British industry."
Industry Reaction and Driver Sentiment
Simon Williams, head of policy at the RAC, offered a mixed response to the Budget measures: "Drivers will be relieved the Chancellor has decided to keep the 5p duty cut in place for now as it saves them more than £3 a tank. But this relief will be very short-lived, given the staggered increase from next September."
The combination of the new eVED for electric vehicles and the confirmation of future fuel duty increases appears to have created a moment of recalibration within the used car market. Consumers and dealers alike are assessing the long-term cost implications of different vehicle types.
This market reaction underscores the sensitivity of automotive purchasing decisions to fiscal policy. The data suggests that even announcements about future tax structures can influence buyer behaviour in the present, particularly for technologies like electric and hybrid vehicles that are often viewed as long-term investments.
As the government seeks to manage the transition to net zero while maintaining tax revenues from road users, the automotive market is likely to remain a key indicator of policy effectiveness and public reception.
