Used EVs residual value is increasing due to customers demand

09 August 2019

Buying a second-hand electric vehicle used to be difficult and feel risky. Nowadays open up your favourite classifieds site and – more often than not – you will find a handful of used electric vehicles (EVs) for sale.

As concerns about emissions continue to grow so does the supply and demand of electric cars – spurred on by new technologies, new partnerships, new models and improving infrastructure.

Sales figures alone aptly demonstrate the rising interest in electric cars, so far in 2019 sales of pure electric vehicles have risen by over 60% and – while they only account for a minuscule 0.6% of the market – that number will only grow as time marches on.

Ever-increasing sales of new EVs means that there is now a far wider range of all-electric hatchbacks, SUVs and saloons available on the used market. So  if you’re thinking about taking the plunge, this might be the right time.

Residual values for used electric vehicles (EVs) are growing as demand for zero-emission vehicles ramps up. Shoreham Vehicle Auctions says the UK has reached a “tipping point of acceptance”.

The electric van market is growing with low mileage business users accepting the benefit of running a used van with very low running costs.

SVA’s managing director Alex Wright said that the secret is the education given to dealers and consumers about the features and benefits of an ever growing range of new and used Electric Vehicles now available.

“EVs need a used market that is alive and prospering. That’s why we have seen greater acceptance during 2018 and into 2019, which has boosted residuals. Companies have worked hard on education, including the SVA team’s training courses run in partnership with the Energy Saving Trust,” explained Wright.

“Leasing companies and finance companies can now underwrite EVs confident of a vehicle’s value in three-to-four years’ time which makes monthly rentals more competitive for companies and drivers alike. The next step is for the charging infrastructure to respond to market needs and provide a more reliable joined-up network of chargers across the country,” he added.

Buying a used EV is essentially much like buying any second hand vehicle, in fact some aspects are much better, with brake wear reduced – thanks to regenerative technology, many second-hand Nissan Leafs in auction were still on their original discs and pads after 60,000 miles – less dirt and pollution from oil and combustion and simple single-speed transmissions.

The downside is that if things go wrong, repairs can be expensive and time-consuming. If a deal looks too good to be true, you might anticipate a much bigger gamble than you expect.

Wright cites the Nissan Leaf as a recent example of how the used EV market has changed. In 2017, a 2015 Nissan Leaf 6.6KW Acenta with 20,000 miles on the clock booked at £8,850. In comparison, in 2019, a 2017 Nissan Leaf 6.6KW Acenta with the same mileage is booking at £11,000, a rise of £2,150.

Recent academic reports such as the one issued by Connected Places Catapult in association with Innovate, states that fleets will be key to driving rapid adoption of EVs – necessary to reach the government’s target of all new car sales being zero emission by 2040.

Wright agrees that fleets are key to future adoption, but only with a healthy used market in place. He also believes that plug-in hybrids are a major distraction for fleets, with business drivers only adopting them because they provide lower rates of benefit-in-kind tax.

SVA says the majority of plug-in hybrids that go through auction still have their charging leads in their original plastic bags unopened, therefore these PHEVs have not contributed to lowering emissions or improving urban air quality as expected.

 



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