The latest data shows that second hand electric vehicles (EVs) had a very tough year. The value of many models has fallen dramatically if you compare to the figures from January 2022. As a leading resource for anyone that offers or wants to start offering a car broker service, we want to take a look at the situation.
Record price levels
The second hand car market in the UK has been exceptionally hot in the last year. The average prices were at record levels with some models peaking in value. There were several reasons for this, most notably the high demand because of a shortage of new vehicles. A number of people also chose to downsize due to the high price of fuel.
However, EVs have had a much different time. The figures show that some models have lost as much as a fifth of the value in the last 12 months. The top ten includes:
- Tesla Model 3 – losing 21.4% (£9,900)
- Tesla Model S – losing 20.5% (17,916)
- Audi e-tron – losing 14.2% (£8,268)
- Jaguar I-pace – losing 13.9% (£7,827)
- Mercedes EQC – losing 13.3% (£8,100)
Other models to make the list also include the Tesla Model X, Smart EQ ForFour, BMW i3, and the Renault Zoe. All of the figures are from Cap HPI data.
Why such a big drop?
The drop in used value is interesting. It comes in a period where there is a big wave of people wanting to make the switch to EVs. In 2022 16.6% of new car registrations in the UK were electric. This was more than new diesel registrations for the first time in history. A lot of people offering a car broker service would have thought second hand models would be in demand.
One of the main reasons for the drop is the boost in the supply of new vehicles. In the last few years there has been a huge shortage because key components were not available in abundance. It hit EVs hard because they require more semiconductors and chips due to the electronics. So, more people had no choice but to buy second hand electric cars. Higher demand meant prices went up. Now though, new supplies are increasing so less people are looking at used vehicles, even those that are only a year old.
In addition, the price to power vehicles has had an impact. Some people chose EVs because petrol and diesel was so expensive. However, the prices have come down. At the same time, the cost to charge electric vehicles has gone up. It makes petrol and diesel cars attractive because they can be more economic for people who drive long distances.
Tax is also having an impact. When people buy a new EV they can take advantage of 2% benefit-in-kind taxation. If you couple this with a salary sacrifice scheme, it makes it much better to get a new electric car rather than a used model.
Finally, there are also some signs that dealers are reluctant to add used EVs to their stock. More of them are entering the market now, meaning there is less competition. As a result, dealers would have to bring the prices down. Some would rather simply not stock them.
Could you offer a car broker service?
At Auto Car Brokers we keep an eye on things like this that can have an impact on brokers. It is a really good idea to do it to make sure you know what kind of vehicles you will likely be targeting and what to potentially avoid.
Car broking is a fantastic option for many people. It can be a great side business to do in your free time or can become your main career if you prefer. The rewards can be fantastic, earning you hundreds or thousands of pounds per deal.
So, why not find out more about starting today? We are the perfect people to offer support with a car broker service. You can use our materials to start quickly or take your business to the next level. Browse our website to learn more or contact us.