Plug-in vehicles are now pretty well established into the new market, but is that yet replicated in the used sector?
The drive to switch to plug-in cars is in full flow, and these vehicles will descend on the used market in the next few years. But for the early adopters with cars finishing a tour of duty, how prepared is the second-hand sector to take on their EVs?
“The electric car market in the UK has reached a tipping point of acceptance as used prices and demand continue to grow based on the greater knowledge of the benefits associated with emissions-free motoring,” says Shoreham Vehicle Auctions managing director Alex Wright. “Dealers have built confidence to sell used EVs, which in turn has given consumers greater confidence. Leasing companies and finance companies can now underwrite EVs confident of vehicle value in three-to-four years.”
Aston Barclay managing director Martin Potter says that the used market is “beginning to mature”, and consumers are comparing which EV or hybrid they can afford compared with a petrol or diesel model.
Cap HPI’s head of forecasting strategy Dylan Setterfield agrees that while EVs generally take longer to sell than petrol or diesel models, more educated dealers are becoming skilled at evaluating buyers.
But he does predict a pressure on used values for electric vehicles as volumes increase.
“Prices in recent years have been supported by manufacturers being able to retain the majority of used vehicles within their own network,” he reports. “But this will become increasingly difficult as the supply of used vehicles increases.”
EV VALUES MORE MODEL-SPECIFIC
The market perception bias around electric vehicles doesn’t yet follow the logic established with petrol and diesel models, according to Dylan Setterfield of Cap HPI.
“Each model needs to fight for its own position in the used market and will respond to changes in supply and demand and overall market conditions throughout its model life,” he tells Company Car today. “In particular, a model from a premium manufacturer that has benefited from strong used values can see a market deterioration once additional electric models from that same OEM come into the used market, especially if they are physically smaller and therefore cheaper.
“Improvements in the new car offering, such as increases in battery range, can contribute to price erosion in older versions”, he says, while admitting that there will always be a market for “even the oldest examples of smaller cars with limited range”.
In the future, the condition of plug-in vehicles’ batteries will become increasingly important to buyers. “We expect the retained battery capacity to be listed as part of the detail of an EV, precisely in the way that mileage is included today for all cars,” says Cap HPI’s Dylan Setterfield.
Remarketing giant BCA has already taken the first step on this road, developing alternative fuel-specific checks in its BCA Assured reports to allow for things like charge port, cables, charging status and traction pack diagnostics.
EVS INCREASINGLY OK
BCA COO UK Remarketing Stuart Pearson on how the company has navigated the past few months
1. Knowledge and power
BCA’s experience is that the market is getting more receptive to alternative fuels as more EVs reach the market. There continues to be improving demand from professional buyers for electric vehicles. Knowledge and confidence in the product has definitely increased, however it is important to use market insight to ensure the vehicle is optimized for sale.
2. Cable condition
Ensure EVs and PHEVs are supplied with the correct charging cable as official replacements can cost several hundred pounds and buyers will factor this into their bidding.
3. Servicing Sorted?
Fleet managers should make sure their alternatively fueled vehicles are serviced at the correct intervals during their working lives by an appropriate dealer and provide a comprehensive service history at the time of sale alongside any associated paperwork detailing the type of powertrain and battery specification.
4. EV specific reporting
Consider providing an independent mechanical condition report. BCA has developed a specific BCA Assured report for self-charging, plug-in hybrid and electric vehicles to build buyer confidence with checks on areas that are specific to these vehicles.
5. Get valuation and prep right
Accurate exterior appraisal and vehicle grading are essential for buyers and if the vehicle needs an MoT soon after the time of sale, get it done early as this will promote buyer confidence. The best prices will be achieved by targeting the right buyer base with the most detailed information