Used electric vehicle prices begin to increase

The average retail value of a used electric vehicle increased in October, after months of decline, according to the latest data from Auto Trader’s Retail Price Index.

Auto Trader say this is due to the combination of increasing consumer demand for EVs, fuelled by attractive prices, and a softening in the recent surge in supply of second-hand EVs entering the market.

The average retail value of a used EV has increased 0.6% so far in October on a month-on-month and like-for-like basis with prices at £32,203. In September, prices were flat month-on-month, which followed 12 consecutive months of decline. While prices are still down on a year-on-year basis, the stabilising market leaves prices -19.6% down year on year - the shallowest rate of year on year decline since June.

At 0.6%, the monthly price growth for EVs is slightly ahead of the 0.2% month on month improvement for petrol values, but just below the 0.7% monthly increase for diesels. On an annual basis ICE vehicles remain well ahead of their electric counterparts, with current petrol and diesel prices up 1.3% year on year (£16,315) and 0.8% YoY (£16,000) respectively.

The increase in used EV prices is being fuelled by favourable market dynamics, with levels of consumer demand outpacing supply levels on Auto Trader’s online marketplace. Demand for used EVs is up 78.4% so far in October – far ahead of petrol (up 2%) and diesel (down -1.1%). What’s more, used EVs are taking just 23 days to leave the forecourts, the fastest since December 2018 and almost a week faster than the 28-day average for the used market overall.

Crucially, whilst demand growth is accelerating, the overall rate of supply growth of used EVs is softening, falling from an increase of 115% YoY in August, and 57% in September, to an increase of just 24.3% so far this month. This imbalance is not only helping to stabilise prices, but also improve potential profitability, as highlighted by Auto Trader’s Market Health3 metric, which for second-hand EVs is up 43.5% year on year so far in October. It marks the strongest Market Health score for second-hand electric cars since March 2022, and is well ahead of the otherwise healthy 3.7% year on year rise in overall used car Market Health.

Commenting, Richard Walker, Auto Trader’s data and insight director, said: “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 is helping to make them a more viable alternative to their ICE counterparts which are still increasing in value. The combination of accelerating demand with softening supply is good news for retailers; although the market remains volatile, for those who follow the data to find and price the right stock for their forecourts, EVs currently represent real profit potential.”