Electric cars suffer ‘unsustainable’ depreciation in second hand market
Fri 1:00 pm +01:00, 19 Jan 2024 3Do you fancy burning up a load of cash? Then buy an electric car…
Electric cars lose as much as half of their value after just three years on the road, new figures show, as the rate of depreciation far outstrips conventional equivalents.
Research from Auto Trader said there were “unsustainable levels of depreciation” in the electric car market, with used prices of battery-powered vehicles dropping by 23pc in the last year alone.
The online vehicle marketplace said a motorist buying a £50,000 electric car could expect to lose £24,000 in value over three years, while a similarly priced petrol car could lose £17,000.
Auto Trader’s latest report warned that “residual values of electric cars remain unsustainably low”.
It said that the price of used electric cars could come under further pressure this year as thousands of motorists return vehicles acquired on three-year leases and as manufacturers cut the price of new vehicles.
“With over 800,000 new electric cars registered between 2020 and 2023, supply returning to the used car market will only increase in 2024, and if demand does not keep up, electric cars could depreciate even further, undermining both consumer and retailer confidence,” it said.
Manufacturers are now applying record discounts to new electric vehicles in a bid to boost stuttering demand.
Auto Trader said car makers were slashing thousands of pounds off prices, with average discounts of 10.6pc offered in December. This compares to discounts of 4.8pc a year earlier.
It predicted that a wave of Chinese entrants would further push down the cost of electric cars.
Sales of new battery-powered vehicles in Britain rose by 18pc last year but accounted for just 16.5pc of all new cars sold – a slight decline from 2022.
This problem will only get worse, as increasing numbers of second hand EVs hit the market after three-year leases expire. Since 2021 sales of new EVs have risen by about 40%.
Collapsing second hand prices will spell disaster for leasing companies, who have offered low lease contracts and other finance deals on the back of high trade in values.
I can’t imagine how anyone thought they would be a good idea anyway. They’re far more expensive than petrol-driven cars; they cost a fortune to insure; they can suddenly catch fire; they can take ages to charge, that’s if you find a charger. So it’s obvious to anyone that their secondhand value would be low.
A smack in the eye for the ‘green’ agenda.
Perhaps in sunnier climes, eg where Henry lives, and the cars can be charged via solar, and the ambient temperature favours the batteries too, they are a more viable option.
Don’t be mugged. If someone is willing to sell a perfectly good car for a low price, buy it. I bought a Nissan Leaf for £13k almost new when list was £31k, Still sells for £13k five years later. I live in West Mercia, and the sun runs 5 bed house and two family cars for around £3k a year. Spend the money on the solar system – say £10-20k and buy the cheaper cars and never look back. If you can also put in air to air heating/cooling in living room and bedroom for maybe £6k, even better. Live in comfort for not much and sleep with ventilated air year round. No blocked nose at nightor dry throat.