11:05 am, September 3, 2024
Some used EVs are depreciating less than petrol models as demand for certain electric cars really picks up.
Auto Trader has analysed current trends in the used electric car market and discovered that while values of some EVs are falling a dramatic rate, others are likely to either depreciate the same or even less than petrol-powered equivalents.
Speaking to Car Dealer Live in the video posted above, Marc Palmer, Auto Trader’s head of strategy and insights, explained two very different pictures are playing out in the used electric car sector.
‘We’ve seen a big drop off in pricing over the past year which has really impacted EVs, but now we’re seeing there are two clear stories,’ he said.
‘Four-, five- and six-year old EVs have reached a point at which they’re at the same price or, in some cases, cheaper than their petrol equivalent. That can be great news for a buyer as if they have home charging, they are getting an EV for the same price as an ICE and potentially will save a lot of money.
‘The questions buyers are asking though are, bearing in mind how much these EVs have depreciated will they carry on losing money? And will they drop faster than the ICE car?
‘We’ve done some analysis using our future valuations and projections data and we don’t think they will. The data is telling us that actually bigger volume electric cars at four or five years old will be worth either the same or they will depreciate either the same or even slightly less than their petrol equivalent.
‘So, over three years between years four to seven, or five to eight, your electric car comes in at roughly the same price and it loses less money than a petrol – that’s great news for drivers.’
The picture is very different for newer EVs, though.
New or one-to-three-year-old models, as frequently reported on Car Dealer, are battered with high depreciation.
‘This is where there is more cause for concern because that’s where we the fastest and steepest rates of depreciation as there’s more returning supply,’ said Palmer.
‘What does this mean for retailers? It’s about being more granular than ever ands really looking at the value of that two- or three-year old car and how quickly you can sell it.’
Palmer explained how healthy the used electric is currently, with supply volumes being up and sales volumes being well ahead by around 50 to 60% year-on-year. In some instances, used EVs are selling faster than petrols and diesels.
Elsewhere in the video, Palmer looks back on the first half of the year for the used car market and what’s in store for the rest of 2024. You can watch it at the top of this story.
Retailers can access Auto Trader’s fully interactive analysis on the future of the car parc (which examines the types of brands, fuel-types, and age of cars on the road) here.
