Used electric cars are representing better value to second-hand buyers, as their prices undercut some combustion-engined equivalents.
Cox Automotive, which owns Manheim Auctions, has reported a “stabilisation” in used vehicle prices, especially for EVs, which are now typically cheaper to buy than equivalent diesels and free of the economic volatility that dogged them earlier in the decade.
The average price of a two-to-four-year-old EV sold by Manheim Auctions was £15,142 as of this week, up 1.1% (£162) from January but down 6.5% (£1,061) year on year.
That was 23% (£3477) cheaper than an equivalent diesel car, the average price of which was £18,619 in February – down 0.8% (£148) month on month but up 6.9% (£1208) year on year.
Equivalent petrol cars still undercut EVs at £13,392 in February (11.6% or £1750 cheaper than an EV), but the gap narrowed during the past year, as average used petrol values rose by 2.4% (£304) month on month and by 4% (£509) year on year.
Cox said the used EV parc was in for “a significant growth trajectory over the next four years”, with volumes increasing by 117.5% by 2028.
It added that dealers – many of which recently shunned second-hand EVs due to price volatility and even introduced buying bans – had begun to acknowledge their value, as they were typically selling faster and performing well, while cheaper examples could look like bargains.
A survey by Cox and Regit, a provider of car management tech, found that 69% of drivers wouldn’t be willing to pay more for an EV over a petrol or diesel alternative, so the “prospect of lower priced used EVs could help drive adoption”.
However, Cox added that second-hand EVs weren’t without their issues. In its latest Insight Quarterly report, insight director Philip Nothard wrote that the “used market for EVs is expected to remain fragmented, as they are generally priced lower than their ICE counterparts, posing challenges when it comes to retaining their value”.
He continued: “This, combined with regulatory pressures, including VAT charges on charging, the changes to benefit-in-kind [tax] rules for PHEVs (which could drive up the rate for certain models from 8% to 24%), Vehicle Excise Duty [from April] and the prospect of road pricing means that an air of uncertainty lingers around the used electric market.”