Combined with limited supply of used EVs on the market, the shift towards incentive-free EV purchasing is threatening to slow down the adoption of plug-in cars in the UK, but it’s certainly not having a negative effect on the used market, for cars at least.
Stuart Pearson, BCA’s chief operations officer for UK remarketing said: “There continues to be improving levels of demand from professional buyers for electric vehicles and rising values reflect that the market is more receptive to alternative fuels. But these values also reflect the rising numbers of premium EVs handled by BCA – Tesla, Jaguar, Audi, BMW, Mercedes-Benz, Polestar – in what remains a low volume sector.
“Knowledge and confidence in the product has definitely increased, however an accurate valuation remains key in a dynamic market and it is important to use market insight to ensure the vehicle is optimised for sale.”
To help with this, BCA has developed a specialised BCA Assured report for self-charging, plug-in hybrid and electric vehicles to build buyer confidence with specific checks on areas that are specific to these vehicles. This includes checks into charge port and leads, charging status and traction pack diagnostics – all things that a traditional used car buyer might not think of.
There is massive demand on the used car market for premium EVs, with the Tesla 3 topping Aston Barclay’s index as the most in-demand car of 2021.
“Our monthly used car desirability index takes into consideration three key metrics, web views prior to sale, number of physical and online bids per sale, and the sale price achieved as a percentage of CAP average,” commented Martin Potter, managing director, customer, at the auction house, Aston Barclay. “Every time a Tesla Model 3 has gone under the hammer we have seen it perform strongly against all three of those criteria.
“In recent months we have seen some cars at between 12-18 months make close to or above retail money. Combined with its consistent new car sales performance we believe the Tesla 3 [was] the most influential EV in 2021,” he added. “One of the key gauges of a new car brand’s market acceptance is how well it performs in the used market and Tesla prices have been very consistent over the past 2-3 years.”
Aston Barclay saw a consistent rise in the desirability of used EVs last year, with the Hyundai IONIQ being the first-ever EV to top its desirability index. In Aston Barclay’s latest used car insights report it also saw prices of BEVs rise by 15.7% (£3,529) to £25,883, which reinforces their increased desirability across the used market.
Other EVs to feature on the desirability list include the Nissan LEAF and Kia e-Niro, proving that it’s not only premium brands that have seen strong used demand.
MG Motor UK, for example, has stopped taking orders for its MG5 EV as it has officially ‘sold out’ of the existing model and won’t be able to fulfil orders until the next-generation car appears at the end of the year. It has also suspended orders for the ZS EV SUV.
MG Motor UK said: “We have taken the decision to temporarily suspend accepting new orders to concentrate on fulfilling our current order banks which are full until the end of this year.
“We placed the final order for current model MG5 EV earlier on this year. Whilse we are working with our production colleagues to increase volume, we are affected by semiconductor shortages which has limited our ability to match supply to demand.”
The move has seen used prices of the ZS EV achieve above retail for nearly new cars, while even 2019 cars have been selling for over £22,000 – a three-year residual value rate of almost 90%. These are times the used car market has never seen before, and it shows no signs of levelling off any time soon.
Meantime, BCA reports that plug-in hybrid models, where available, are the most in-demand of all among customers.
“Hybrids are very well established and the new generation of plug-in hybrids are increasingly popular with used car buyers, as they offer cheap electric-only power for short trips, yet longer journeys are free from ‘range anxiety’ thanks to their petrol or diesel engines,” said Pearson. “PHEVs typically don’t attract any charges when using congestion charging zones, which can be a significant benefit for motorists if they are regularly driving in these areas. These factors all combine to make plug in hybrids an attractive purchase for professional buyers who can feel confident there is a decent level of retail demand for these vehicles.” Remarketing basics apply to EVs/Hybrids just as any other vehicle – condition, presentation, appraisal and an accurate valuation are always important.
Pearson added: “BCA works with vendors to minimise issues like missing cables, keys and paperwork and will ensure the vehicle is charged and ready for sale [and] supplied with the correct charging cable as official replacements can cost several hundred pounds. Buyers will factor this into their bidding if not present.
“Fleet managers should make sure their alternatively fuelled 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.”
“Consider providing an independent mechanical condition report as well. BCA has developed a specialised BCA Assured report for self-charging, plug-in hybrid and electric vehicles to build buyer confidence with specific checks on areas that are specific to these vehicles. This includes checks into charge port and leads, charging status and traction pack diagnostics. Accurate exterior appraisal and vehicle grading is essential for buyers and if the vehicle needs an MOT soon after the time of sale, get it done early as this will help promote buyer confidence.”
While the market for used plug-in cars is extremely buoyant, electric vans are still being approached with scepticism by used dealers, though analysts expect this to change as their acceptance becomes more wholesale.
Paul Kirby of EV Essentials explained that additional care needed to be taken to highlight operational factors such as range, speed of charging, and payload.
“Arguably more so than diesel vans, potential buyers of eLCVs need to know that the vehicle they are considering will meet their operational needs. That means actively highlighting their capabilities in terms of range and charging.
“To some extent, remarketers of electric vans will be educating many people about how to use these vehicles, their advantages and their limitations. This is a role that the sector really will need to adopt to amplify sales and values.”
Paul said that used eLCVs were unlikely to hit the used market in any significant quantity for some time to come, probably around the middle of the decade – so the situation is
very different to that of cars and the end user is of a very different clientele.
“We’re in a situation where the mass supply of these vehicles is only just starting to take place and a majority of the orders are being placed by major fleet operators who could well hang onto them for five or six years.
“My personal view is that demand for used eLCVs will exceed supply well into the second half of the decade and, for that reason, there is every reason to expect values to be strong.”
