Diesel demand high as prices for used electric and hybrid cars fall

Wholesale demand for used diesels remains ‘very strong’, according to Autorola’s analysis of used cars sold via its MarketPlace online platform in Q2.

Diesel prices rose by 0.7% (£130) from £17,332 in Q1 to £17,462 at 42 months and 30,967 miles in Q2 2024 as Autorola predicts diesel residuals will rise on the back of dramatically falling new car sales.

Diesels accounted for 19.6% of all used cars Autorola sold online during Q2, the second most popular powertrain after petrol which dominated sales at 63.6%. Hybrids accounted for 12.9% and EVs just 3.9%.

“Diesel has been written off from all quarters as new car sales continue to fall, but in the used sector they accounted for one in five used cars sold to dealers online in Q2,” explained Jon Mitchell, director, Autorola UK.

“Demand has remained consistent since 2020, but at some point, we expect the market to reach a tipping point where prices rise due to new car sales falling for the past five years.”

During Q2 Autorola saw used petrols rise 2.9% (£391) to £13,662 at 43 months and 25,528 miles while used hybrids fell in price by -3.6% (£764) to £19,650 at 42 months and 30,967 miles. Used EVs rose in price by 9.1% (£1,626) to £19,480 at 26 months and 19,209 miles, but this was caused mainly by model mix rather than the market going crazy for zero emission cars.

“Q2 has been a very positive quarter for used cars following a tough end to 2023,” said Mitchell. “Demand and sales volumes were down compared with the same period in 2023, but the market has bounced back in 2024. We believe it will remain buoyant well into 2025.”

Used EVs and hybrids fall by almost a fifth

The aaverage prices of the UK’s most popular used electric and hybrid vehicles slumped by nearly a fifth (19%) in the three months to June compared with the same period last year, according to the latest AA Used Car Index.

The average price of the 20 most popular second-hand EV and hybrid cars on the AA Cars platform dropped from £23,255 in Q2 2023 to £19,456 in Q2 2024, while there was also a 12% decrease compared with the previous quarter.

The Toyota Yaris, which is the most sought-after car on the list, has fallen in price by 14% over the past 12 months, while the Toyota Prius which is the second most popular has dropped by a massive 52% over the same period.

Every one of the top 20 used electric or hybrid used cars on the AA platform fell in price between Q2 2023 and Q2 2024, as the market saw a surge in the number of second-hand models coming up for sale.

Most searched-for EVs and hybrids in Q2 2024, with annual and quarterly price changes

Source: AA Used Car Index 

In contrast, the average price of the 20 most popular used petrol and diesel cars on the platform has increased in the three months to June.

Prices rose by 3.5% in the three months to June compared with the previous quarter, reversing two consecutive quarters of falling prices.

The average price of the most in-demand used cars stood at £18,519 in Q2 2024, up from £17,897 in the three months to April.

The Audi A5 has seen by far the biggest increase (33%) quarter-on-quarter, while Audi’s A1, A3, A4  and Q3 models have all seen modest price rises too. The Nissan Qashqai is the most-sought after car on the list and has increased in value by 2.9% between Q1 and Q2 2024.

Despite an average increase in value quarter-on-quarter, used car prices remained down 3.9% on the second quarter of 2023, driven by significant price reductions for the Volkswagen Golf (-22%), Ford Fiesta (19%) and Ford Transit (18%) among others.

Most searched-for vehicles in Q2 2024, with annual and quarterly price changes

Source: AA Used Car Index 

James Hosking, director of AA Cars, said: “Demand for second-hand EVs and hybrid vehicles continues to rise, but prices are coming down thanks to a surge in supply.

“Buyers are seeing lower average prices as corporate leases begin to expire and thousands of former fleet EVs come onto the second-hand market for the first time - providing greater choice and more attractive prices for buyers.

“The overall downward pressure on pricing is likely to continue, but reductions vary considerably between different makes and models.

“Prices of the most popular petrol and diesel used cars have rebounded after falling for two consecutive quarters, although in most cases the increases are relatively modest.

“Buyers will find that prices for a lot of used cars are still considerably lower than they were this time last year, and that there are plenty of good deals out there.”

Improving market confidence helping cars sell quickly

The used car market has entered H2 with strong momentum behind it, boosted by improving consumer confidence and favourable market conditions which are not only helping cars to sell quickly, but also increasing sales, and stabilising retail prices, says Auto Trader.

The average price of a used car in June was £16,410, which on a month-on-month and like-for-like basis, is a fall of just 0.5%, in line with seasonal trends.

Since the start of the year, the used car market has recorded very robust levels of consumer demand, says Auto Trader, and at the half-way point shows no signs of slowing.

In June, the level of demand on Auto, rose 12.4% year-on-year, marking the highest rate of demand growth in 15 months.  

The underlying demand in the used car market is further highlighted by the 80.8 million cross platform visits to Auto Trader last month, which is a 10% increase on June 2023, and a significant 21% rise on 2022.

What’s more, Auto Trader data shows that used cars are currently selling in just 29 days, three days faster than the same period last year, and five days faster than pre-pandemic 2019 (34 days).

The growing levels of consumer demand in the market is combined with a recent drop in supply.

In fact, whilst supply of used cars entering the market began to improve towards the end of last year, over the last quarter available stock has slowed, and in June fell 4.2% year-on-year, the largest drop since May 23.

Due to the impact of the pandemic, supply levels of cars aged below five years old are facing the biggest squeeze, with those aged 1-3-years and 3-5-years recording a drop of 20.6% year-on-year and 16.7%, respectively.

Conversely, with production now back to normal levels, supply of ‘nearly new’ cars (those aged below 12-months old) are up 42% year-on-year.   

Auto Trader’s Market Health metric, which assesses potential market profitability, rose to 15% in June; up from the 11% recorded in May, and the highest rate of growth since April 2023.  For stock aged 3-5-years-old, it’s up 43% year-on-year.

Rachael Jones, Auto Trader’s data of automotive finance, said: “At the halfway point, our data shows that the core fundamentals of the used car market are very solid.

“Consumer demand is robust, and cars are selling at pace, which coupled with the recent contraction in supply, means used car prices have returned to seasonal norms.

“The coming months will hold some challenges, not least the pressure on stock, but the used market is entering the second half of the year with some real momentum behind it, and so our outlook remains very positive.”

Top 10 used car price growth (all fuel types) - June 2024 vs June 2023 like-for-like

Source: Auto Trader

Top 10 used car price contraction (all fuel types) - June 2024 vs June 2023 like-for-like

Source: Auto Trader