11:18 am, August 22, 2023
The used EV market is showing signs of stabilising after a year of plummeting prices.
That is according to fresh data from Auto Trader which suggests that falling values could finally be beginning to slow following.
The firm’s latest Retail Price Index found that in the month to August 20, used EV prices dropped by just 0.3 per cent month-on-month.
The figure is the lowest level of monthly contraction seen since July of last year, with the average price of a used EV on Auto Trader now standing at £35,297.
Experts say the reduction in decline is down to a dip in sky-high levels of supply in recent months, which have far exceeded demand.
There are now only 12,000 second-hand EVs for sale each day on Auto Trader, down from over 18,000 in early March.
However, despite signs that tumbling prices could be beginning to ease, average values for used EVs are still down 21.6 per cent on the same point last year.
Richard Walker, Auto Trader’s data and insights director (Pictured), said: ‘Although electric values are still easing, context is important. The EV market is still an immature one, and what we’ve seen over recent months is a natural correction following a huge surge in stock.
‘With supply beginning to soften and demand increasing with the help of very attractive savings for car buyers, we’re seeing clear signs of prices stabilising.
‘It means for retailers who follow the data, and source the right electric stock for their forecourt, there’s some very strong profit potential.’
Strong growth elsewhere in ‘nuanced’ wider market
Looking at the used car market as a whole, Auto Trader’s data showed that used car values grew in August, although at a slower rate than in previous months.
Year-on-year growth eased from 2.8 per cent in July to to 1.5 per cent in August with the average price of a used car now standing at£17,819.
However, experts say the market is far more nuanced than the headline figures, with a significant disparity between age cohorts and fuel types, which is being driven by large variances in market dynamics.
Specialists found that older vehicles are outperforming the overall market, and by some margin, recording strong levels of price growth.
Cars aged between 10-15-years-old have seen values rocket by a massive 11 per cent year-on-year so far this month, leaving their average value at £6,629.
The performance is the result of very strong consumer appetite for older and more affordable vehicles, with the current levels of demand growth for 10-15-year-old cars up 10.9 per cent and outpacing levels of supply growth (up 7.9 per cent).
On the flip side, retail prices of younger models have dipped this month, with the average value (£36,862) of ‘nearly new’ models dipping by 0.5 per cent so far in August.
Demand for this age group remains exceptionally strong, increasing 37.9 per cent on August 2022, but it’s struggling to keep pace with the large volume of cars entering the market, which are up 53.2 per cent over the same period.
Walker added: ‘The overall retail market is stable, but as our data illustrates, it’s incredibly nuanced, with large differences in supply and demand across segments causing significant variations in pricing.
‘With supply of younger cars improving, values of sub-five-year-old-cars are largely flat, whilst prices of older, and more supply constrained vehicles, continue to grow.
‘Even at this granular level, there are major variances between fuel-types, which highlights just how critical it is for retailers to follow the data, and not the headlines to inform their pricing and sourcing strategies.’
