In a rapidly evolving automotive landscape, the world of used electric vehicles is experiencing a significant resurgence. The latest data from Auto Trader's Retail Price Index reveals a compelling narrative, where the recovery in used EV values is driven by a combination of increasing consumer demand for greener vehicles and a softening in the recent surge of supply. With the average retail value of a used EV increasing by 0.6% on a month-on-month basis, the market is showing signs of stabilising and robustly defying a year-on-year decline.
The most striking revelation from the data is the continuous surge in used EV prices. So far in October, used EVs have seen their average retail value increase to £32,203, marking a 0.6% month-on-month growth. This surge comes after a stagnant September, which followed 12 consecutive months of decline. While prices remain down compared to the previous year, the rate of year-on-year decline is showing signs of softening at almost -20%, marking the shallowest rate since June.
Compared to other fuel types, EVs are displaying more significant growth, ahead of petrol and just below diesel. Petrol and diesel vehicles, on the other hand, have experienced price growth of 1.3% and 0.8% year-on-year, respectively.
The increase in used EV prices is primarily attributed to favourable market dynamics. Consumer demand for used EVs has surged by an astonishing 78.4% so far in October, far surpassing the growth of demand for petrol (up 2%) and surpassing diesel (down -1.1%). Moreover, used EVs are leaving the forecourts in just 23 days, the fastest since December 2018, and almost a week faster than the 28-day average for the used car market overall.
Interestingly, the rate of supply growth for used EVs is softening, falling from a remarkable 115% year-on-year increase in August to a more modest 24.3% in October. This imbalance between demand and supply is contributing to the stabilization of prices and improved profitability, as indicated by Auto Trader's Market Health metric, which has seen a 43.5% year-on-year increase for second-hand EVs in October.
Richard Walker, Auto Trader's data and insight director, remarked, “The continued realignment in used electric pricing is the real stand-out so far in October, with another month of improvement after a year of decline. For the moment, we're seeing the stars align for second-hand EVs; greater affordability and rising prices at the pumps are helping to make them a more viable alternative to their ICE counterparts which are still increasing in value.”
While the demand for used EVs is soaring, younger cars entering the second-hand market are experiencing slower pricing growth. This phenomenon is largely attributed to the ongoing de-fleeting of approximately 750,000 new EVs purchased over the last three years, which has resulted in a decline in the retail prices of younger aged vehicles.
The retail price of used cars less than a year old has deepened its year-on-year decline to -2.9% in mid-October, down from -2.5% in September. Cars aged 1–3 years are currently experiencing a year-on-year decline of -6.7%, consistent with the rate recorded in the previous month.
The overall health of the used car market remains robust, underlined by the 0.8% increase in prices on a month-on-month basis, aligning with typical seasonal trends. Moreover, the market has seen an astonishing 44% price growth compared to pre-pandemic levels in October 2019. Current levels of consumer demand on Auto Trader have surged by 5.7% compared to the same period last year, and used cars are selling at a faster rate, with an average time of 28 days, making it the quickest since May and surpassing the figures from the previous year.
The decline in younger vehicle values doesn't tell the whole story. At the older end of the market, 10–15-year-old used car prices are maintaining a double-digit price growth, rising 10.2% year-on-year and 2.2% month-on-month. Five- to 10-year-old car prices have also demonstrated a robust 2.5% year-on-year increase.
As the automotive market continues to evolve, used electric vehicles are becoming a compelling choice for consumers. Their affordability, combined with rising fuel prices, is making them an attractive alternative to traditional internal combustion engine (ICE) vehicles. With the current growth in demand and softening supply, the used EV market is not only stabilizing but also presenting profitable opportunities for retailers.
In a market that remains dynamic and ever-changing, those who closely monitor the data to find and price the right stock for their forecourts stand to benefit from the profit potential presented by used electric vehicles.