The Rise of Used Electric Cars: What You Need to Know

After a year where prices kept going down, the UK used electric vehicle market is now seeing something new. Dealers say more people want to get a used electric vehicle now. They also report that prices have gone up for two months straight. This is a big change for the used EV market. Before now, the market for used electric vehicles had too many cars and prices were dropping.

Now, the electric vehicle market is showing signs it can go up again.

Industry data shows that the price of three-year-old used cars went up by 1.2% in October. That is about £300 more for each car. The biggest increase was in used electric cars. Their value went up by 2.9%. That means about £600 more per car than before.

Two standout performers:

Dealers say this change is a big comeback. It has happened because people feel better about buying now. There are more cars to choose from, and prices for used EVs are better for buyers.

This article explains:

• Why are used electric car (EV) prices going up again
• Which electric car models are worth more now
• Why you see more dealers with electric cars
• What this rise means if you want to buy a car or get car finance
• Why this may be the best time for you to finance a used electric car

Why is demand for used electric cars surging?

In the past year, the electric vehicle market has seen prices fall quickly for used electric cars. A lot of electric vehicles that came off leases, especially those from company cars and fleet cars, were put into the used market at one time. This led to there being more cars available than what people wanted. Worries about how long the battery will last and how easy it is to charge also made people less interested, so prices dropped in the used electric vehicle market.

Prices fell because:

• A lot of ex-lease and ex-fleet electric cars hit the used market at the same time.
• Buyers did not feel good about the battery health and how far these cars could go.
• Many people did not fully understand the charging setup or how it would work for them.
• A lot of people thought that new EV prices were dropping, so used cars became less valuable.

Because of this, used EVs lost value faster than people thought they would. Petrol, diesel vehicles, and hybrid cars did not lose their value as quickly. During that same time, they kept their value better than used EVs.

But the situation has now reversed.

The used car market is changing. People now see that used EVs can give better value than older cars that run on fuel. As more used EVs come from fleets and leases finish, experts think demand will have significant growth. EV sales and their market share in used cars will likely go up from this.

The shift: EVs are now seen as great value

Used electric cars cost about the same as many petrol or hybrid cars now. Some even cost less. The good prices help more people buy them. Many people who used to think these cars were too costly or risky now feel that they can get one. This change lets more people think about electric cars as a real option.

Consumers are now looking at a 3-year-old EV and putting it next to a petrol car that is 5 or 6 years old. They see the things both cars can do. They also notice how both feel to drive and what they need over time. People now know how each choice. Both have good points and things to think about. More are seeing what makes an EV different from a petrol car. They look at cost, care, how well it works for every day, and what fits best.

• The EV is new.
• It has more tech.
• It can be cheaper to use and keep working.
• You may get lower monthly finance payments.

The way prices are changing is making used EVs easier for people to buy. Now, prices of these cars are not going up and down quickly. Many used EVs also still have their battery warranties. This helps lower people’s worries about getting a second-hand electric car, so more are ready to try them.

Dealers are reporting new buyer behaviour such as:

• First-time EV buyers are looking at them earlier in the process of choosing a car.
• Families are moving from petrol cars to EVs, as their way of driving is good for electric.
• Finance applicants want more details about what it costs to own an EV.

Dealers say that electric cars are now more easy to buy. This is true mostly for cars that are between two to three years old. A big drop in price has already happened for these cars. So, people can get them at a good value.

Buyers now pick used EVs more often because of the good effects on the environment. Used EVs give zero emissions from the exhaust. This helps cut down their carbon footprint and brings down the overall environmental impact. When you look at the total cost of ownership for these cars, they also come out ahead. There are lower fuel costs, and you get fewer parts that need fixing compared to diesel cars. A lot of people look at the new car market and find better value in a used EV. A nearly-new EV can work out well for most people.

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What is driving the price increase?

Many things make more people want to buy used electric cars now.

• Lower used EV prices have made it easier for people to start owning one.
• More dealers are willing to keep EVs on their lots.
• Car supermarkets are now getting in more EVs than before.
• People now know more about charging EVs and how far the battery can go.
• With more chargers at work and supermarkets, owning an EV is now easier.

In early 2024, used EVs hit their lowest prices yet. This made them a good deal when you looked at the prices of petrol or hybrid cars. When dealers saw that people liked these low prices, they started to stock more used EVs.

Many of the used EVs on the market now are newer models. They have better battery technology and can go much farther on one charge. People are looking on online platforms to shop for used EVs. The price point you find with these used EVs is also good for most buyers. A lot of government incentives in the past, like EV salary sacrifice, have helped get more EVs into the used market. Because EVs work with electric motors, not engines with many moving parts, maintenance costs are lower.

More consumer understanding = fewer barriers

Two years ago, buyers worried about:

• Where they can charge
• How much time charging will take
• If the battery will lose power fast

Today, most drivers know:

• Public charging has gone up a lot.
• A lot of workplaces and supermarkets now have places for you to charge.
• Battery warranties usually last 8 years or as long as 100,000 miles.

More people know about electric cars now. This makes them feel better about buying one. The old worries are not there anymore. People feel more sure and are ready to get an electric car.

EV ownership is now easier because there is more EV charging infrastructure. You can use public charging points, rapid charging hubs on the motorway, or charge with a home charger. Many drivers now know that how far you go depends on the size of the battery and the battery capacity, not how old the car is. For most people, it is more convenient to charge their car at home with a home charger than to fill up at petrol stations.

Dealers are pushing retail prices up

Trade values for used EVs stay a bit lower than what people pay at retail. This gives dealers a way to make some money. At the same time, retail prices are going up because more people want to buy used EVs.

The market is now seeing:

• Retail prices are higher.
• Trade values are a bit lower.
• Stock sells faster.

Dealers make stronger margins when:

• They get EVs for less money when they trade.
• People want to buy EVs, so they can sell for more.

When dealers get to make more profit, they buy more stock. This makes the cycle keep going.

In short:

Why buyers are choosing used EVs over petrol and hybrid cars

From consumer research:

• The cost to run an EV is much lower than an internal combustion car.
• You do not have to get oil changes or engine servicing, so you pay less for maintenance.
• You can still get road tax exemptions if you have some electric models, and it depends on their age and the emissions policy.

Used EVs are now associated with:

• There be lower bills for service.
• Running your car can cost less.
• Finance payments be lower because the car price be less.

Petrol and diesel cars are not as popular now. This is because there are bans and rules in clean air zones. Older cars might need to pay fees every day in these areas. EVs give better value since you do not have to pay these fees at all.

Monthly finance payments are now a key driver

Because capital cost is lower:

Lower car price = lower monthly finance repayment

This is making more people choose to finance used EVs with PCP and HP.

Used EV demand vs used petrol and hybrid cars

More people still want to get used petrol and hybrid cars. But right now, prices for EVs are going up faster. A lot of people also show more interest in buying an EV than before.

The used electric car market is now the fastest-growing part of the electric car market. This means more people now want an electric car that is not new. A lot of buyers look for these cars because they can be a good value and better for the environment. The electric car market is also getting bigger each year as more people want to go green.

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Why dealers are stocking more used EVs

Dealers have stayed away from EVs for a long time. This is because they worry about several things.

• Battery range
• Charging availability
• Uncertain depreciation

Those concerns have declined because:

• There are now more charging spots all over the UK.
• Makers of electric vehicles give longer warranties for batteries.
• People know more about what it is like to own an EV.

Car supermarkets and independents now have many more used EVs in stock. You can find a good number of these cars at both types of places. This means there is more choice for people who want to get a used EV.

Dealers like used EVs because:

• They sell stock more quickly.
• Margins are better.
• Retail prices go up each month.

Availability is going up now. There are more 3-year-old electric cars in the used market because:

• Fleet returns are going up.
• A lot of leasing cycles are ending now.
• Part exchange volumes are also getting higher.

This has led to more used EV sales. It has helped the used EV market grow. Now, you see a bigger share of EVs in used car sales at dealerships all over the country.

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Why used EVs are especially attractive at 3 years old

Most EV warranties are:

• The battery will last for 8 years.
• The rest of the vehicle will have 3 years.

Therefore, a 3-year-old EV often retains:

• 5 years of battery warranty
• 2+ years of manufacturing support

That makes used electric cars look much better to people. It also cuts down on the risk for buyers.

Battery warranties help give people peace of mind when they buy an electric car. They know the car will get help if something happens to the electric car batteries. Some older electric cars can still get zero road tax. This is true for models that were registered before there were changes to the road tax rules.

The sweet spot for value

Consumer mindset shift:

• Petrol cars lose their value slowly over time.
• EVs lose value fast at first, then the price stays steady.

Now that EV prices have settled down, people feel better about getting a loan to buy them.

Used EVs + finance = a growing trend

Many people who get used electric cars do not use cash.
They pick car finance instead.

Why?

• Drivers can change cars more often.
• Buyers do not have to worry about the car losing its value later on.
• The monthly payments are less than they were before.

For example:

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Fleet returns are feeding the used EV boom

Large leasing fleets, like those from companies with electric cars, are now selling off their 2022 models. These cars are:

• The car gets all the needed care.
• It has not gone far.
• Most of the value drop has already happened.

These vehicles enter the used market with:

• Stable resale values
• Attractive finance rates
• Battery warranties still active

Dealers love these because they are:

• It is easy for people to sell.
• It does not cost much to pay for.
• People find it nice to buy.

Many fleet EVs started out in electric car salary sacrifice schemes. This made them cheap to buy when new. After a couple of years, they move into the used market. At this time, the value drops to a good level for finance buyers.

Will used EV prices continue to rise?

Analysts say the next two months are critical.

If retail demand stays strong:

• Dealers will push prices up further

If seasonal slowdown enters the market:

• Some models may flatten temporarily

Dealer interest is high now, and a lot of people say the prices for electric vehicles are:

This is the first time in a year that prices in the used EV market have kept going up.

For buyers who want to get finance, you need to act early. This can help you lock in:

• Lower vehicle price
• Lower monthly payments

See how much you can save when you compare car finance today.

FAQs about demand for used electric cars UK

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