UK car dealerships are facing serious pressure in 2026 from two major problems: a shortage of used cars entering the market and rising overhead costs, according to industry experts. Some firms have already collapsed, including one of the UK's most profitable second-hand dealers, Cargiant, which began winding down operations in April after plunging into liquidation.
Fewer Used Cars and Higher Costs Squeeze Dealers
Cherie Carter, founder of Indigo Car Hire, told Express.co.uk that selling cars has become "more complicated" due to these twin pressures. "There are simply fewer used cars entering the market than there were a few years ago, which makes sourcing stock more difficult and more expensive," she said. "On top of that, running a dealership has become costlier, whether that is financing vehicles, paying staff, or maintaining large sites."
Carter explained that while demand for cars remains strong, margins are tightening. "So even if cars are selling, the margins are tighter, and that is where some businesses are getting squeezed," she added.
Dealership Closures Mount in 2026
Several dealerships have faced difficulty this year. In addition to Cargiant's collapse, Group 1 Automotive closed a number of BMW dealerships in the UK. Earlier in June, Lancashire-based The Car Sales Factory Limited also entered liquidation after six years in business. AA cars has noted that these closures reflect persistent pressures on the sector.
Adaptability Key to Surviving the Storm
Carter advised dealers to adapt by offering short-term access to cars, using smarter pricing, or reducing reliance on large physical sites. She also highlighted the need for a wider discussion on making the transition to electric vehicles more practical and affordable for both dealers and customers in the coming years.
