Automotive market update - February: New car market records highest February volume in 22 years

Welcome to our monthly market insight article where we provide a snapshot of what’s happening in the UK automotive market. Each month, we highlight key industry updates and trends, including electric vehicle (EV) adoption, plus our vehicle leasing insights.

Here Managing Director Kelly Marshall gives her take on February’s performance.

What’s happening with new car sales in the UK?

February is typically a quieter month for new car sales as buyers tend to hold off until the March number plate change.

But that wasn’t the case this year. New car sales were at their highest February volume in 22 years, according to the latest data from The Society of Motor Manufacturers and Traders (SMMT).

In total, 90,100 vehicles were registered - a 7.2% increase on February 2025.

At Gateway2Lease we also experienced a bumper month with our sales and those of our partner, The Electric Car Scheme, collectively up a record 40% year-on-year.

Plug-in hybrid electric vehicle (PHEV) sales up 43.5%

Drivers flocked to buy plug-in hybrids - cars with both a rechargeable battery and an engine, which provide the benefits of electrification without the range anxiety. Their sales were up 43.5%, a similar level to January’s sales performance.

So called 'self-charging' hybrids, which don’t need to be plugged in, also did well, rising 3.3%. Electric vehicle (EV) sales rose 2.8% to 21,840 cars. Their market share was slightly down on the same period last year but that’s understandable as people rushed to buy EVs at the start of 2025 ahead of the introduction of vehicle excise duty in April.

We’re also still seeing the impact of the EV sales push at the end of last year as manufacturers sought to meet the Zero Emission Vehicle (ZEV) Mandate.

Our EV sales across business contract hire (BCH), personal contract hire (PCH) and salary sacrifice show a greater uplift than the SMMT registration figures. In January, EVs accounted for 54% of our total sales but in February this rose to 61%, thanks to the continued popularity of salary sacrifice.

What drove sales in February?

Retail sales drove overall demand in the new car market, according to the SMMT. But fleet and business still have the biggest market share at 62.6% year-to-date.

Our sales also lean towards businesses. In February, 62% of our sales were either BCH through Gateway2Lease or salary sacrifice through our partner The Electric Car Scheme.

And that explains why we have so many EVs in our most popular model listing for February as businesses continue to enjoy benefit-in-kind tax of just 3% this financial year.

Gateway2Lease’s top 10 most popular cars in February*

1. MG ZS
2. MG HS
3. Kia Sportage
4. Tesla Model Y
5. Omoda 5
6. Jaecoo 5
7. BYD Seal
8. Nissan Qashqai
9. Changan Deepal S07
10. Tesla Model 3

*Includes cars sold through The Electric Car Scheme

The UK’s top 10 best-selling cars in February

1. Ford Puma
2. Kia Sportage
3. Mini Cooper
4. Tesla Model 3
5. Jaecoo 7
6. Volvo XC40
7. Volkswagen Tiguan
8. Vauxhall Corsa
9. Ford Kuga
10. Hyundai Tucson