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Investigation: Incentivising used electric car buyers with govt-backed interest free loans could hugely boost adoption

Time 8:11 am, March 5, 2021

Car buyers should be incentivised to buy a used electric vehicle to help improve air quality and supercharge the technology’s uptake.

Experts have told Car Dealer that incentives – like that seen in Scotland where car buyers can access interest-free loans to buy used EVs up to £20,000 – should be rolled out across the UK.

New electric vehicles benefit from a £3,000 government grant, but currently there are little incentives for people to buy a used model, despite the fact the cost of entry is often more affordable.


Tom Barnard, editor in chief of Electrifying.com, said an interest free loan would give buyers a real reason to go electric when buying used.

He said: ‘Being able to access funding interest-free for five years would make low-emission cars price-comparable with a petrol or diesel for many motorists, even before the lower running costs are taken into account.  

‘Bolstering the used market also has the knock-on effect of improving residual values, which makes finance on new electric cars cheaper.


‘Any incentive which encourages the take up of electric vehicles is something which will be applauded by anyone who wants to improve air quality.’

Barnard added that the ‘higher purchase cost’ of EVs is one of the only factors that puts people off switching to electric.

Classified advertising marketplace Auto Trader has seen the number of electric car adverts viewed on its site triple in three years.

The website’s commercial director Ian Plummer said that despite this interest its research points to a ‘wealthier demographic’ of buyers currently considering electric.

He told Car Dealer: ‘To drive conversion from consideration to purchase on a wide scale will require a meaningful financial incentive accessible to everyone, and one that’s not limited to just brand-new cars.’

Plummer explained that the average cost of a volume used electric vehicle was nearly £20,000 with premium EVs costing around £45,000 in the second hand market.

He said: ‘It’s no surprise that two in three consumers say upfront expense, as well as infrastructure, remain major barriers to adoption. 

‘We’d strongly encourage Westminster to review the success of the Scottish government’s Low Carbon Transport Loan, and carefully consider the positive contribution it could have on realising its Road to 2030 objectives.’

And he’s not the only one who thinks the government should take note.

Jim Holder, editorial director at Haymarket Automotive, said the cost of EVs was certainly a barrier to entry for electric car ownership.

He told Car Dealer: ‘The government has set its line in the sand with regards to electrification, and if it is to achieve its goal anything it can do to encourage uptake should be considered.

‘Here, the benefit is clearly that it can look at the data from Scotland’s leadership and evaluate if the scheme has been a success – from there, the decision should be simple.

‘Above all, cost is one of the barriers that comes up time and again when we poll in-market buyers as to what’s standing in the way of them making the switch to an electric vehicle.’

He also noted that consumers buying electric vehicles could also have ‘the biggest impact’ on reducing emissions by moving drivers out of polluting models.

Steve Fowler, editor-in-chief of Auto Express, agrees that incentives for used electric vehicle buyers will help more consumers make the switch.

He said: ‘If the UK is serious about widespread electric vehicle adoption, then incentives need to play a crucial part.

‘They’ve already proven to play a big role in the huge growth of new EV sales, but added incentives to persuade used car buyers to make the switch are also needed to help more motorists benefit from the low running costs – if not purchase costs – that electric cars can bring.’

Halfords also believes that incentives across the EV market, including used models, would have a positive impact.


Andy Randall, managing director of Halfords Autocentres, said: ‘Our research indicates that a more targeted approach to EV incentives may be required if the whole country is to join the green transport revolution.

‘We believe this should include financial support for second-hand EV purchases, in the form of interest-free loans or grants.’

Analysis by Halfords in partnership with research group RAND has also revealed a regional disparity in the take up of EVs.

Hull, Peterborough and Plymouth have the lowest adoption rates of privately owned ultra-low emission vehicles out of 27 UK towns and cities studied. Their share of the total fleet ranges between just 0.13 per cent and 0.17 per cent.

The London boroughs of Wandsworth and Barnet have the highest figures at 1.60 per cent and 1.42 per cent respectively. The study also found a correlation between average household income and private EV ownership.

James Baggott's avatar

James is the founder and editor-in-chief of Car Dealer Magazine, and CEO of parent company Baize Group. James has been a motoring journalist for more than 20 years writing about cars and the car industry.



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