Sales of used cars are increasing as consumers with limited funds avoid the new automobile market.

According to the Society of Motor Manufacturers and Traders (SMMT), used car transactions increased by 4.3 percent from July to September compared to the same period last year, reaching 1.96 million.

A record 53,423 of these were electric vehicles (EVs), representing a 57 percent increase or around 19,000 more.

However, EVs still made up only 2.7pc of the market, with more traditional petrol and diesel cars still accounting for 91.7pc combined. Hybrids made up the rest of the market.

The top five used cars sold were the Ford Fiesta, the Vauxhall Corsa, the Volkswagen Golf, the Ford Focus and the Mini.

The continued rise in used car sales stands in stark contrast to the faltering new car market, which saw a 4pc drop in purchases by private consumers over the third quarter.

Ian Plummer, commercial director at Auto Trader, the online marketplace for used cars, said there continued to be strong demand for “middle-aged” EVs, defined as vehicles that are three to five years old. Many have now reached price parity with their petrol or diesel equivalents.

He added: “With the recent lacklustre performance in the new car market, it’s very positive to see such strong consumer appetite for used EVs.

“On our platform, demand has rocketed this year, especially among the middle-aged electric cars.

“They’re currently flying off forecourts 10 days faster than the rest of the used car market, which highlights just how vital a role affordable prices will play in the UK’s transition to electric.”

However, Mike Hawes, the chief executive of the SMMT, warned that the growth of the used market “depends on a healthy new car market, particularly for EVs”.

The SMMT is lobbying the Government to provide bigger financial incentives for consumer purchases of EVs, amid concerns that manufacturers are currently having to discount each car by £5,500 on average to get them out of showrooms. The industry has warned that such discounts are not sustainable.

Mr Hawes said: “Giving consumers the confidence to switch from their familiar petrol or diesel vehicles requires confidence and incentives, otherwise many would-be new car buyers will sit on their hands, leading to a diminishing market that will inevitably limit used car availability and affordability.

“This will be to the cost of motorists, the economy and the environment – making a review of support for the transition and the regulation intended to deliver it, an urgent priority.”

The Government’s main policy for encouraging the takeup of EVs, known as the zero emission vehicle (ZEV) mandate, imposes sales targets for new cars on manufacturers. Companies face fines for falling short of these targets, leading to suggestions that some are rationing petrol and diesel car sales in order to avoid penalties.

Used cars represent the vast majority of the UK’s passenger car market, with roughly four in five of all sales involving a second-hand vehicle.

The number of second-hand purchases increased by more than 330,000 to a total of 5.89m in the first nine months of 2024.