Thinking about buying a car in 2025? You’re not alone.
With changes to UK interest rates, more affordable electric vehicles (EVs), and a shifting used car market, many drivers are wondering:
“Is now the right time to buy?”
Whether you’re after your first car, upgrading to an EV, or eyeing a solid used deal, this guide covers everything you need to know to make an informed decision in today’s market.
- UK Interest Rates Are Falling
- EV Prices Are Dropping
- Used Car Prices in 2025
- Smart Buying Tips for 2025
- Should You Buy a Car Now?
UK Interest Rates Are Falling
In 2025, the Bank of England has continued to reduce the base interest rate to 4.25% as of June, from a high of 5.25% in 2024. This decision is designed to ease the cost of borrowing — and that’s good news if you’re looking at car finance.
So, what does this mean for you?
- If you’re using a personal loan or dealer finance, your monthly repayments could be lower.
- Leasing deals may become more competitive too, especially on new models.
Keep an eye out for 0% APR promotions or cashback offers from dealerships trying to boost sales — especially around summer.
EV Prices Are Dropping
Electric vehicles (EVs) are becoming more affordable — and more popular.
In May 2025, EV sales made up nearly half of all new car registrations in the UK, thanks to aggressive price cuts from manufacturers like MG, BYD, and Nissan. Even premium brands like Mercedes-Benz and Audi are offering discounts to stay competitive.
Key reasons why EVs are cheaper:
- Increased supply and competition
- Government incentives and dealer offers
- Battery tech is improving, reducing costs
However, not all EV brands are winning. Tesla’s UK sales dropped 36% in May due to fewer updates and production issues. As a result, some nearly-new Teslas may now be more affordable.
🔋 EV tip: Before buying electric, check your charging options at home, local charging networks, and battery health if buying used.
👉 Related: The Ultimate Guide to Buying A Used Electric Vehicle
Used Car Prices in 2025
Looking for value in the used market? You’re in luck.
In May 2025, the average UK used car price was £16,825, according to Auto Trader, the same recorded in May 2024. Prices have stabilised since last year, so you’re unlikely to see big swings — making it easier to plan your budget.
Why the market’s strong for buying a car in 2025:
- Buyers are returning to used vehicles after new car shortages in previous years
- More nearly-new models are becoming available as lease cars return to dealers
- Prices have levelled out after years of inflation
Top tip: Buy from a reputable dealer or use Total Car Check to verify the vehicle’s history before committing.
👉 Related: Top 10 Questions to Ask When Buying a Used Car
Smart Tips for Buying A Car In 2025
Here’s how to make the most of the current market and avoid costly mistakes:
✅ Check the vehicle history
Before buying any car, run a Total Car Check to reveal:
- Outstanding finance
- Previous write-offs
- Mileage discrepancies
- Stolen vehicle reports
✅ Shop around for finance
Compare offers from:
- Car dealerships
- Online brokers
- High-street banks and credit unions
Calculate the total cost over the term — not just the monthly payment.
✅ Consider regulations and infrastructure
Cities like London, Birmingham, Bristol and others have ULEZ and Clean Air Zones (CAZ), implementing daily charges for less environmentally friendly vehicles. So a low-emission or electric car could save you hundreds of pounds per year in charges. But if you’re considering an electric car and can’t charge at home, make sure there’s good availability of charge points near to where you live.
✅ Know your needs
- Do you do mostly short urban trips? Consider an EV or hybrid.
- Long motorway journeys? A diesel or efficient petrol might suit you better — but check their future resale value.
- Need space for family or dogs? A small SUV or estate might be better than a hatchback.
Should You Buy a Car Now?
Yes — but only if it’s right for your needs and finances.
Here’s a quick summary:
✅ Finance is cheaper than last year — thanks to lower interest rates
✅ EV deals are better than ever — especially on newer brands
✅ Used car prices are stable — meaning less risk when buying
But timing matters. If you’re not ready, don’t rush. Car prices, especially on EVs, may fall further as competition heats up.
The best approach?
Do your research, check the vehicle history, and compare deals.
Final Tip: Always Run a Vehicle History Check
Before handing over any cash — whether buying from a dealer or private seller — run a Total Car Check. It could save you from buying a write-off, stolen car, or vehicle with outstanding finance. Don’t forget to run your important manual checks too. Use Total Car Check’s free VIN check tool to help lower the risk of buying a cloned car.