The Iran war split the UK used car market in three: what the data shows

On 28 February 2026, US and Israeli forces launched strikes against Iran. Within hours, oil markets moved sharply higher, petrol forecourts began repricing, and analysts started warning about the Strait of Hormuz. Within days, something unusual was happening in the UK used car market — something the headline numbers completely fail to capture.

The aggregate picture looks almost calm. Overall buyer demand across all fuel types has dropped about 4% since the war started. Retail rating has actually improved. If you glanced at the summary, you might conclude the used car market shrugged off the conflict and moved on.

That reading is wrong. The average is hiding three completely different markets, moving in completely opposite directions, at a pace and scale that is genuinely striking. This is what the data actually shows.

The number that hides everything

AutoTrader publishes a buyer demand score for each vehicle on its platform — a measure of how much interest that car is attracting relative to comparable stock. They also publish a market supply score and a retail rating. We track these signals daily across our entire live stock.

On 28 February, overall buyer demand across all fuels was 35.8. By 30 March it was 34.5. A change of -4% over a month that included a major geopolitical shock and a global energy repricing event. Perfectly reasonable. Nothing to see here.

Except that number is an average of three things that are doing radically different things. When you split it out by fuel type, the picture looks like this: EV demand has risen from 42.3 to 65.5 — up 55%. Petrol demand has fallen from 31.8 to 18.2 — down 43%. Diesel demand has dropped from 16.7 to 13.4 — down 20%. The EV surge and the petrol collapse are roughly cancelling each other out in the aggregate, making the overall market look stable when it is anything but.

The EV surge: why it happened and why it’s sustained

The logic of the EV demand surge is not hard to follow. The Iran war made fuel prices a front-page story overnight. UK petrol prices rose by 14 pence per litre in the four weeks following the strikes — roughly £1.40 more per fill-up for a family hatchback, and those costs compound over a year of driving. Diesel rose by 29 pence per litre. When the cost of running a petrol or diesel car rises sharply and unpredictably, the case for switching to electric sharpens immediately.

But the data shows something more interesting than a simple spike. EV demand didn’t just jump and then fade back — it has continued climbing throughout March, reaching 65.5 by the end of the month. This is not a panic response that corrected. It looks more like a step-change in how buyers are thinking about fuel costs, with the war functioning as a catalyst rather than a temporary shock.

There is a supply dimension to this as well. EV market supply has actually tightened since the war started — from 59.3 on 28 February to 46.3 by 30 March. More buyers competing for fewer available cars. The pricing implication of that dynamic is straightforward.

Perhaps the most telling signal is the retail rating. For most of January and February, AutoTrader rated EV stock roughly 15 points below petrol stock on its retail rating scale — mid-46s for EVs versus mid-63s for petrol. The retail rating measures how well-priced a car is relative to comparable market stock: a low score means the car looks expensive relative to alternatives; a high score means it looks competitive. EV stock was being rated significantly below petrol all winter, suggesting EV asking prices were on the high side relative to market appetite. By 30 March, the EV retail rating had risen to 63.4 — almost exactly equal to petrol’s 63.2. That convergence has never happened before in our data. It means AutoTrader now considers EV stock to be priced as competitively as petrol stock, even as EV asking prices haven’t fallen. What changed is that market appetite caught up with the prices.

The petrol collapse: demand without panic

Petrol demand has had a bad month. Down 43% from war day to 30 March — a significant fall by any measure. But there is an important nuance in the data that prevents this reading as a catastrophe.

The petrol retail rating has remained almost completely stable throughout: 63.5 on 28 February, 63.2 on 30 March. This matters because retail rating reflects how petrol stock is priced relative to the market. If the 43% demand drop were reflecting genuine buyer panic or a structural shift away from petrol that was feeding back into pricing, you would expect the retail rating to be falling too — sellers cutting prices to chase shrinking demand. It hasn’t moved.

What this suggests is that petrol buyers haven’t disappeared. They have paused. Whether that pause becomes permanent depends significantly on what happens to energy prices over the next few months. If the Strait of Hormuz situation stabilises and fuel prices ease back, petrol demand is likely to recover toward its pre-war levels. If fuel costs remain elevated through spring and summer, the pause may start to look more like a shift.

The market shock did hit petrol briefly. Overall buyer demand — which is heavily weighted by petrol stock volumes — dropped to a trough of 26.2 on 7 March, roughly 13% below war day. That trough lasted approximately 10 days before recovery began. The market absorbed the initial shock faster than most observers expected.

The diesel crisis: the story nobody is talking about

If the EV surge is the headline and the petrol fall is the obvious follow-on, the diesel story is the one that deserves more attention than it is getting.

Diesel market supply was essentially negligible on 28 February — a supply score of 1.2, meaning the market was very thin, with very few competing cars available. By 30 March, the diesel supply score was 15.2. That is an increase of 1,167% in a month. At the same time, diesel buyer demand has fallen from 16.7 to 13.4 — down 20%. The diesel retail rating has drifted from 58.1 to 53.1, the weakest of the three fuel types and falling.

The supply surge and demand softening are now crossing over — more diesel cars entering the market competing for fewer buyers, with pricing pressure as the inevitable consequence. This crossover happened in mid-March and the gap has been widening since. Diesel stock that would have sold quickly in January is now sitting in an increasingly crowded market.

The irony is that the Iran war — which sent diesel pump prices up 29 pence per litre — appears to have simultaneously accelerated the exit of diesel from retail favour while flooding the used market with the diesel stock people are trading out of. The cars people are selling to switch to EVs are, disproportionately, diesel cars.

What this means if you’re buying a car right now

If you’re in the market for a used EV, the data suggests acting sooner rather than later. Supply is tightening as demand rises. The retail rating parity moment — where EV stock is now considered as competitively priced as petrol stock by AutoTrader’s pricing algorithm — is a meaningful signal that EV asking prices are unlikely to soften in the near term. The market will come to the cars rather than the cars coming to the market.

If you’re looking at diesel, you have more leverage than you did six weeks ago. Supply has expanded dramatically, demand is softer, and retail ratings are drifting lower. A buyer who is prepared to be patient and negotiate has a better hand in a diesel negotiation today than at any point in the last year.

Petrol sits in the middle: demand is down but not structurally so, and retail pricing has held firm. Petrol buyers who have been waiting may find that the current softer demand environment offers a short window of slightly better availability, even if prices haven’t materially moved.

Finance rates are an additional consideration. With gilt yields surging to their highest level since 2008 in response to the conflict, and the Bank of England having held rates unanimously in March while signalling the possibility of rises, the funding cost environment for car finance is moving against buyers. Current rates may look considerably more attractive in three to six months’ time.

None of this is a guarantee. The conflict could de-escalate rapidly. Energy prices could fall back. Buyer behaviour could reverse. But the direction of the data as it stands is clear, and clear data is worth knowing about when you’re making a decision of this size.

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Data source: AutoTrader buyer demand, market supply, and retail rating signals tracked across Carsa’s live UK stock. Period: 1 January – 30 March 2026. Finance from 8.9% ARP (10.9% APR representative). Carsa is a credit broker, not a lender.