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Used electric car prices are falling

Are drivers getting cold feet about buying used EVs?

Published: 17 Jan 2023
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Prices for used electric cars are dropping. Despite the fact recent research suggested electric vehicles will always cost less to ‘refuel’, Cap HPI director of valuations, Derren Martin, told industry mag AM that there’s been less interest and this is leading to a significant drop in the resale value of used electric cars.

Used EVs are reported to be dropping four times faster than their diesel counterparts. Martin said: “EVs aren’t moving off forecourts quickly. What we’re seeing is consumer pushback against EVs at a time when volume is starting to come into the market.” 

Every other month for the past couple of years, we’ve seen car makers launch yet another battery-electric car as they work diligently towards the arbitrary government deadline of 2030, after which manufacturers won't be allowed to sell brand-new petrol or diesel cars. 

As a result, many carmakers have pledged to make their ranges entirely emission-free sooner. This increased choice is another reason used EV prices are declining, driving a shift Martin believes will be “the new normal”.

“Manufacturers are starting to deliver EVs in greater volume and, at the same time, finance repayments are looking more appealing on a new EV than they might in the used sector.”

Martin could be right. We're seeing the likes of Mini offering free home charging points worth around £1,000. Tesla has just cut the UK price of its Model Y and Model 3. The latter has lost almost 25 per cent of its resale value in the last year. Ouch. But they're not alone, since BMW, Audi and Fiat models have also seen residual values fall, albeit not as greatly - to as much as five per cent.

Retailers already have very little stock available to sell for various reasons. The global semiconductor shortage has left the world of everything tech (so everything, these days) without the chipsets needed for the smart connectivity we’ve come to know and love.

What’s more, the war in Ukraine has put key production in Eastern Europe in an awkward position. Russia, as well as having all that oil and gas (it’s one of three top crude producers), also has a veritable supply of rare and precious minerals, which the world’s car makers rely on for electronics and batteries. Great.

Should any of the situations above turn themselves around for the better, you’ll be the first to know.

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