Dealer demand for used BEVs ‘stronger than petrol’

Used battery electric vehicles (BEVs) continue to interest retailers, with an improvement in auction conversion rates in August, according to Cap HPI.

The current average is 1.3 sales attempts for BEVs, it says, while petrol vehicles have an average of 1.5 sales attempts before selling.

Pure hybrids were the best-performing fuel type over the past month, dropping by an average of just 0.2%. Petrol cars dropped by just 0.6% on average.

EVs decreased by an average of 1% (£240), and plug-in hybrids experienced a similar decline.

BEVs have now experienced a full two years of monthly value drops, although the rate of decline has slowed, according to Cap HPI.

Since September 2022, BEVs have seen their used values decrease by more than 60%, making them far more affordable and desirable for retailers to stock.

However, the current situation is mixed with a number of electric models experiencing an increase in values.

The Audi Q4 E-Tron Sportback, Ford Mustang Mach-E, MG5, Nissan Leaf, Peugeot e-2008 and the Tesla Model S all went up at the three-year age point.

Derren Martin, director of valuations of Cap HPI, said: “As we approach the final quarter, there may be some trepidation due to the large realignment of last year, with values dropping by an average of 10.5% from October to December 2023.

“It is highly unlikely that there will be a repeat in 2024. There will not be the same high volumes of defleets all at the same time, interest rates are more stable and cost-of-living concerns less prevalent, meaning less of a drop in demand.

“Flies in the ointment can always appear, and the new car market will be one to watch. However, if manufacturers deliberately reduce sales of ICE cars to assist with their ZEV mandate targets, this could make similar used models more desirable. Responsible remarketing is also key to ensuring a stable market.”

Across the board, strong wholesale demand supported used car values in August as the average value movement fell by just 0.6% at the three-year age point.

The seasonal norm for August is a decline of 0.7%.

The past four months have proven notable due to the robust market performance. Values have dropped by an average of just 0.5% per month and 2% in total.

Martin explained: “The reduction of prices in the final quarter of last year took some of the necessary heat out of values that had been prevalent since the increases of 2021, but without returning them completely to where they were.

“It seems used car prices reached a fair level for retailers and consumers at the start of 2024, and as a result, they have been largely stable ever since.

“There are nuances within this, and where supply outstrips demand for certain models and fuel types, values have fallen, but as an average, used car prices have experienced a stable year thus far.”

At the one-year age point, values also dropped by an average of 0.6% (£250), with older ages slightly more affected in percentage terms, 10-year-old values dropping by 2.1% on average, or £85.

MPVs have dropped more than the other mainstream sectors, by 1.3% on average. However, these movements are similar this time in previous years and certainly not seismic, says Cap HPI.

The main volume sectors of lower medium (C-Sector), supermini, and SUV, which make up over 75% of the sold trade data received so far this year, all dropped by around 0.5%, illustrating the stability in the market even where there is volume.

Used hybrids prove most popular fuel type, says Indicata

Looking at July in detail, separate analysis by Indicata, suggests that the used car market is witnessing a significant shift towards hybrids away from petrol.

Used mild hybrid electric vehicles (MHEVs) and plug-in hybrids (PHEVs) accounted for almost one in three (30.8%) of July’s sales of used cars up to four years old.

This came at the expense of petrol cars whose market share has fallen by over 10% in just 19 months from 59.8% in January 2023 to 49.4% in July 2024.

The market share of EVs meanwhile rose to 9.4% in July as falling prices continue to entice consumers to buy used EVs. That means more than four out of every 10 (40.2%) used cars purchased in July were either a hybrid or an EV.

The Audi e-tron and MG ZS EV also headed up Indicata’s list of the fastest-selling used cars in July.

Diesel market share, meanwhile, continued to fall, hitting just 10.3% in July, the lowest on record at Indicata.

Dean Merritt, head of sales at Autorola UK, said: “Drivers have been switching to hybrids increasingly over recent months, especially those that aren’t quite ready to make a move to a full EV.

“Hybrids like EVs are all part of the seismic change that the used market is currently going through, with consumers being given more choice when they purchase their next used car.”

However, he added: “From the evidence in our July report consumers are continuing to embrace this opportunity to move away from traditional ICE cars.”