Greggs recently announced it was increasing the price of its breakfast deal to offset rising employment costs¹.
It might not sound like motor trade news, but it is.
Because when a high-volume, high-street operator decides it has no choice but to move prices, it tells us something important about the wider cost environment we’re all operating in.
And that absolutely includes used car retailing.
A positive start, but let’s keep it in context
Autotrader’s latest data suggests 2026 has started positively. Retail prices are rising and transaction volumes look resilient².
But we should keep perspective.
We’re comparing against December, traditionally one of the quietest months of the year, and on a true like-for-like basis, the market is up just 0.2% on January 2025². Meanwhile, Consumer Prices Index sits at 3.4%, up from 3.2% in November³.
Sales are always welcome. But as the saying goes, volume is vanity, profit is sanity.
The real question isn’t whether cars are selling.
It’s whether dealers are making enough on them.
Used car retailing has always been tough
Years ago, I heard a line that stuck with me:
“If there were an apocalypse, the first things to survive would be bacteria and used car sales executives.”
There’s humour in it, but there’s also truth.
Used car retailing has always required resilience. You’re dealing with a depreciating asset from the moment you buy it. Time really is money.
We’ve seen plenty of high-profile names try to “reinvent” the sector, Virgin, Tesco and more recently Cazoo. Cazoo, once valued at over £5bn, collapsed into administration in May 2024⁴.
Established dealers are still here because they know how to adapt.
But even that agility is being tested.
The pressure points in 2026
Rising costs
The list is long.
- Automotive property consultancy Rapleys warned dealers could face a £1 million-a-day business rates burden from April 2026 following the latest valuation changes⁵.
- BDO’s 2025 Motor Salary Survey reported overall remuneration rising 5% year-on-year⁶.
- APD Global Research highlighted sharp increases in dealer costs including marketing (33%), technology (33%) and EV infrastructure investment (20%)⁷.
- Motor trade insurance premiums surged by 10–15% in 2025 and may continue rising into 2026⁸.
And that’s before we even talk about utilities, rents and logistics, all of which continue to pressure margins⁹.
Greggs increased its breakfast deal by 6.8% to offset labour costs¹.
Applying that kind of increase to a £17,000 used car is a very different proposition.
Stock shortages
We’re still living with the aftershocks of the pandemic.
Around 2.5 million new cars that would normally have entered the market simply didn’t. That gap is now feeding directly into the used supply chain.
Autotrader projects that five- to six-year-old stock could decline by 25–30% in 2026 compared with 2024, with the shortfall potentially worsening to 35% in 2027 for certain age groups².
That’s not a short-term blip. That’s structural.
Margin compression
Rising costs. Constrained stock. Highly informed buyers. And a digital marketplace that often feels like a race to the bottom on price ranking.
All of that squeezes margin.
The result? A continued reduction in the number of UK dealers over the past year, part of a longer-term consolidation trend¹⁰.
So, what can dealers do?
There are only so many levers available, but two stand out to me.
1. Cost control — possibly through collaboration
We’ve recently seen examples of “co-opetition” — competitors collaborating where interests align, particularly around platform pricing and proposed changes¹¹.
It raises an interesting question: could similar collaboration help in areas like remarketing or technology, where supply has become increasingly concentrated?
Dealers have always adapted individually. The next phase may require some collective thinking too.
2. Pricing reality
This is the harder conversation.
According to Autotrader’s Retail Price Index, the average used car price reached £17,103 in November, up just 0.5% year-on-year².
When costs are rising materially faster than that, something eventually has to give.
I’m not suggesting blanket price hikes. But I do think we need an honest debate about sustainability. Margins that look stable on paper may not be keeping pace with underlying cost inflation.
And that matters for long-term health.
The bigger picture
I remain optimistic about used car retailing.
This sector has survived recessions, regulatory change, digital disruption and shifting consumer behaviour. It will adapt again.
But 2026 won’t reward complacency.
It will reward agility.
Cost discipline.
Clear pricing strategies.
And operational efficiency, particularly in areas like finance turnaround times and deal completion.
As ever, I welcome debate. The motor trade has never lacked strong opinions, and that’s part of its strength.
References
¹ Sky News – Greggs increasing prices due to higher employment costs
² Autotrader Retail Price Index & Market Data
³ UK Consumer Prices Index data (CPI)
⁴ Cardealer Magazine – Cazoo administration coverage
⁵ AM Online – Rapleys business rates warning
⁶ BDO UK Motor Salary Survey 2025
⁷ APD Global Research – Used Car Tracker 2026
⁸ Nash Warren – Motor trade insurance premium report 2025–2026
⁹ AM Online – Dealer cost concerns 2025
¹⁰ The Sun – UK dealership closures report
¹¹ Car dealer Magazine – CMA ruling on BCA/Aston Barclay takeover
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