The new car market is set to return to a ‘push’ model in 2024, delivering significant discounting and finance offers to stimulate consumer demand – particularly for electric models.

Auto Trader is predicting around a 4% rise in new car sales for 2024

Auto Trader said manufacturers will work to tackle a combination of slowing retail sales, new regulatory targets and increased competition from new entrants with a range of incentives that will help drive demand.

It’s predicting around a 4% rise in new car sales; from an estimated 1.89 million in 2023, to circa 1.97 million in 2024.

EVs will be a particular focus; as of next year, the ZEV mandate will require 22% of all brand sales to be zero emission or face a fine of £15,000 for every non-compliant vehicle sold. However, the current average share of EV sales across brands is just circa 16%, and for some, it’s as low as 3%.

While demand for battery electric vehicles (BEVs) will remain robust among fleets – SMMT November data showed more than three-quarters (77.4%) of fully electric cars were taken on by fleets and businesses – retail EV sales will need action. As of November, these were down 29% versus 2019 and accounted for only one in 10 of all retail sales.

Auto Trader also said the used car market will increase in 2024, fuelled by robust and resilient demand, but with growth hampered by supply pressures.

It forecasts transactions will increase to an estimated 7.24 million sales, up from the 7.17 forecast for this year.

But potential market growth will continue to be hampered by the three million ‘lost’ cars that weren’t sold between 2020 and 2022, during the pandemic. Current stock levels on Auto Trader are up just 2% on December 2022, and show significant variations across different market segments. The volume of cars aged up to a year old has increased 32.2% over the same period (albeit down circa 50% on 2019’s levels), whilst those aged 1-3 and 3-5 have fallen 10.5% and 7.3% respectively.

The automotive online marketplace also says there’s no crash in sight for used retail prices – with consumer demand still outpacing returning supply and helping to stabilise the recent softening in used car retail prices. More buyers traditionally come into the market after the festive lull, and retail used car prices are likely to pick back up at the beginning of the new year.

Auto Trader commercial director Ian Plummer said: “Whilst there’s no doubt that 2024 will have its challenges, the used car market will be starting the new year with some momentum behind it. Although new car retail faces uncertainty, manufacturers have been active in stimulating consumer demand, which we’re already seeing play through on our marketplace, with 16% more new car enquiries being sent to retailers. Coupled with increased competition from new entrants vying for UK market share, next year’s looking very attractive for car buyers wanting to make the electric switch.”