Second-hand electric cars become cheaper than petrol and diesel for first time
The price of second-hand electric cars has fallen so fast that they have become cheaper than used petrol and diesel cars for the first time, new figures show.
The average price of a three-year-old used electric vehicle (EV) is 8.5 per cent less than its fossil fuel equivalent after prices plummeted by 50 per cent since September 2022, according to HPI, the car history and valuation group. The difference rises to 14 per cent after four years.
The landmark comes as separate new figures showed sales of used EVs soared to a new record in April, May and June.
Experts say the falling prices are largely down to rapid technological advances such as significant improvements in battery power that make newer models increasingly more attractive than older ones.
As a result, “early adopters” of EVs are switching to newer models in large numbers.
At the same time, a growing interest in environmentally friendly models and the rapid price drops are enticing new people to the used EV market – while the cost of fuel is also lower for electric cars.
This helped push up second-hand EV sales by 52.6 per cent in the second quarter of 2024, compared to a year earlier, according to separate figures from the Society of Motor Manufacturers and Traders (SMMT).
“The growing availability of second-hand electric models is driving demand as motorists want to reduce their environmental footprint and making significant cost savings due to high diesel and petrol prices,” said Chris Plumb, EV specialist at HPI.
Mike Hawes, SMMT Chief Executive, added: “The increased supply of electric vehicles to second and third owners is helping more motorists make the switch. Maintaining momentum requires reliable, affordable and green EV charging up and down the country and incentives to get all of Britain on board the net zero transition.”
Mr Plumb said that exact comparisons between petrol and diesel cars and EVs can be difficult because they rarely have like-for-like specifications.
However, as a broad comparison, HPI’s average trade valuation figures for three-year-old cars with 30,000 miles on the clock showed EVs were 8.7 per cent or £2,379 cheaper than petrol and diesel ones in May 2024, he said.
These are the wholesale prices that dealers pay for their cars, so they aren’t identical to the retail prices buyers pay on the forecourt, he pointed out.
According to HPI data, on average, values of used EVs, for cars at the same age and mileage point, have halved since September 2022.
For models such as the Jaguar i-Pace, Mercedes EQC and Tesla Model X, this can equate to well over £20,000 less than in the summer of 2022, and for cars like the Porsche Taycan, up to £40,000 less, “making previously unobtainable cars now obtainable to more consumers”, Mr Plumb said.
At the cheaper end, cars like the Nissan Leaf have halved in value and can be bought for less than £10,000 at three years old now. Tesla can regularly be seen advertised on the web below £20,000 – unheard of a couple of years ago.
However, the deflation in prices experienced over 2022-24 is highly unlikely to be repeated, and now that they are reasonably priced, they hold their value far more, he added.
Meanwhile, EV insurance costs remain expensive – with price comparison site Quotezone showing they are typically 54 per cent higher than for petrol or diesel vehicles. This is because parts can often be hard to source while there is a shortage of trained technicians to carry out the repairs.