CAR MARKET BOUNCES BACK SHARPLY AS BUYERS ADAPT TO NEW TAX RULES

The UK’s new car market recorded a sharp recovery in April, with registrations rising by nearly a quarter compared with the same month last year. The increase follows a distorted period in 2025, when buyers rushed purchases ahead of tax changes.

Industry figures point to renewed momentum across fleet, private, and business segments, alongside continued growth in electric vehicle uptake. The data offers a snapshot of a market still adjusting to fiscal policy while moving toward electrification targets.

The Society of Motor Manufacturers and Traders (SMMT) reported that 149,247 new cars were registered in April, marking a 24.0% rise year on year. According to the SMMT, the comparison is influenced by unusually low figures in April 2025, when many consumers had already brought forward purchases to avoid new tax measures introduced at the start of that month.

Those changes included the removal of vehicle excise duty exemptions for zero and low-emission vehicles. Electric vehicles priced above £40,000 also became subject to the luxury car tax, adding £425 annually on top of standard rates. These shifts reshaped buying patterns, with lingering effects still visible in the latest data.

Broad-Based Growth Led by Fleet Demand

Growth in April was recorded across all buyer types, with fleet registrations driving the overall increase. According to the SMMT, fleet purchases rose by 26.8%, reflecting continued demand from businesses and organisations managing vehicle renewals or expansions.

Private retail registrations also showed notable improvement, increasing by 20.2%. The smaller business segment recorded a 15.0% rise. This spread suggests that the recovery is not confined to a single part of the market, though fleet activity remains the dominant force.

Ian Plummer, chief customer officer at Autotrader, noted that the market’s performance comes despite wider economic and geopolitical uncertainty. According to Autotrader, April’s figures represent the closest monthly performance to pre-pandemic levels in recent years.

Plummer also pointed to structural changes within the market, including increased competition from new manufacturers and a steady flow of new model launches. These factors, combined with targeted consumer offers, appear to be encouraging buyers back into showrooms.

Electric Vehicle Share Rises Despite Policy Pressures

Electric vehicles continued to gain market share, with battery electric cars accounting for 26.2% of new registrations in April, up from 20.4% a year earlier. According to the SMMT, registrations of these vehicles increased by 59.1% year on year, and the UK reached a cumulative total of two million battery electric cars on the road during the month.

This growth comes as manufacturers work toward the government’s zero-emission vehicle mandate, which requires 33% of new car sales to be zero-emission in 2026. Flexibilities within the system allow some compliance through the sale of plug-in hybrid vehicles.

SMMT chief executive Mike Hawes said the April figures highlight both progress and ongoing challenges. According to the SMMT, he warned that the cost of meeting regulatory requirements could affect consumer choice and the competitiveness of the sector if policy does not align more closely with market conditions.

At the same time, industry voices have pushed back against claims that demand for electric vehicles is insufficient. Delvin Lane, chief executive of charging operator InstaVolt, said the latest figures demonstrate continued consumer uptake, with drivers increasingly choosing electric options in significant numbers. The April data reflects a market shaped by policy shifts, recovering demand, and a gradual transition in vehicle technology, all unfolding at the same time.

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2026-05-05T13:39:30Z