‘We don’t want your electric cars’: why half of used car dealers are reluctant to buy used electric cars

Half of car dealers are reluctant to buy electric cars due to the shocking depreciation of electric cars last year, according to a new report.

Owners of electric vehicles (EVs) are being warned to ‘expect little enthusiasm’ when trying to sell their battery-powered cars to dealers, according to a survey of used car dealers by HonkHonk.

More than one in three dealers said they are ‘much less interested’ than a year ago in taking over someone’s electric car, while one in eight are ‘slightly less interested’ as thousands of euros are cut from the value of these cars have been wiped out. when prices plummeted last year.

Declines in the price of electric cars were widely reported by This is Money in 2023.

In December, based on data from market experts, cap hpi, we listed the thirty electric cars that had lost the most value during the calendar year.

The worst was the Seat Mii Electric. A one-year-old example of this battery-powered city car would have been worth £18,650 in early 2023, but a 12-month-old Mii was valued at just £10,150 in December – that’s a 46 per cent deflation.

In fact, the top 10 EV nosedives fell in value by more than 39 percent last year – and older models were hit just as hard.

HonkHonk, a trading platform that connects motorists with dealers looking to buy used motorcycle shares, says that because last year’s price drops wiped out almost half the value of some EVs, dealers are ‘afraid’ to stock them today, in the belief that there is little. to gain in terms of profit.

A survey of 66 independent dealers across the country asked whether their attitudes towards buying electric vehicles for their forecourts had changed compared to 12 months earlier.

More than half said their intention to buy electric vehicle stocks had diminished.

More than a third (38.5 percent) said they were ‘much less interested’, while a further 12.3 percent were ‘slightly less interested’ in purchasing new EV stock.

In contrast, only 7.7 percent responded to the survey that they were much more or somewhat more interested in acquiring electric cars from owners.

Dealers’ refusal to take on new stock of electric cars could drive values ​​down even further, with owners forced to take less if they want to replace them with something else.

Sebastien Duval, CEO of HonkHonk, said: ‘The problem is that the shocking depreciation we saw for many EV models last year has dealers worried that they will lose money if a car doesn’t sell quickly.

“It’s in stark contrast to dealers’ willingness to buy in stock in general, as we see demand for other cars soar when HonkHonk users list them.

‘Right now, dealers can’t get enough small or medium petrol cars, medium diesels and even hybrids since the market started to recover in 2024. year ago.’

Dealers’ refusal to take on new stock of electric cars could drive values ​​down even further, with owners forced to take less if they want to replace them with something else

Market analysts have reported that electric vehicles are partly a victim of their own success, with supply on the second-hand market increasing and rapid improvements to the latest new models making used examples less rare, but also less attractive to motorists.

Combined with the ongoing problems of inadequate charging infrastructure, previous generations of EVs – with their lower range – are losing out to the kind of smaller petrol and diesel cars that drivers rely on and the improved but expensive new EV models.

This drives down the price dealers are willing to pay for EVs if they are keen to add them to their inventory.

One Jaguar I-Pace driver commented on a the owner’s forum that the JLR dealer they were using offered to take their 18-month-old, 5,000-mile electric luxury car – which cost £77,000 new – in exchange for a value of £27,000. That means a loss of £50,000 (-65 percent) in just a year and a half.

Duval said: ‘Dealers are much more risk averse after last year’s tough market, meaning they are hungry for cars they know they can sell quickly.

‘It’s good news for anyone looking to sell their traditional economical family car direct to a dealer, but we’d warn anyone looking to sell their older EV not to expect much enthusiasm from dealers.

‘They are probably better off trading in their older EV with the dealer who sells them a new EV.’

Auto Trader says EV values ​​have fallen, but consumer demand for used models remains

However, Auto Trader paints a slightly different picture of the existing level of demand for used electric vehicles, based on activity on its website. In fact, it is said that the market health for electric cars is currently much greater than that for gasoline cars.

In its February Retail Price Index, which is based on an analysis of about 800,000 motorcycles for sale on its platform, it said second-hand electric vehicles are in high demand.

Interest in used electric cars “rose by as much as 81.5 percent year-on-year in February,” the report said.

The company says this combined with a -1.1 percent drop in supply, which in turn drove a whopping 83.6 percent increase in what it calls “market health.”

Auto Trader says on its website it is seeing strong demand for electric vehicles, although this has not stopped the decline in the value of electric vehicles over the past 12 months. The average advertising price for an electric car on the platform was 16% lower in February than a year earlier

Demand for electric cars from a premium brand increased by 77.3 percent (supply increased by 10.4 percent), while regular electric cars from the ‘volume brand’ increased by 58 percent (supply decreased by -10.7 percent).

Interest in ‘super premium’ electric cars (such as Porsche’s Taycan) rose 175 percent in February, despite a 37.6 percent increase in the supply of models entering the used market.

In contrast, demand for used gasoline cars (6.2 percent) was only slightly above supply (5.6 percent), resulting in a conservative increase in market health of 0.6 percent.

Yet Auto Trader’s own data shows that there has been a big drop in average EV values ​​used over the past twelve months.

In February 2023, the average price of a second-hand electric car was £33,701. A year later, the average price over the past month has fallen by almost 16 percent to £28,488.

Although the number of used petrol cars has also fallen, the decline is at a slower pace.

The average price of a used petrol model fell from €16,062 to €14,978 – a drop of 7 percent.

Richard Walker, director of data and insights at Auto Trader, told This is Money that the increase in the supply of used electric cars and increased competition is fantastically new for buyers – but not so much for sellers.

‘The demand for second-hand electric cars has been strong. The number of listings in our market has almost doubled year-on-year to 17.5 million in January and February, and the number of inquiries sent to electric car retailers has also increased. That is why with a greater supply comes more choice, and therefore more buyers. It’s great to see the market maturing and opening up electric vehicles to a wider range of drivers,” he explains.

‘Two-year-old electric cars in particular are in the spotlight, as their more attractive prices allow consumers to afford the cars – while brand new electric cars still command a hefty price premium, putting them out of reach for many.

‘Although price falls last year had an impact on confidence in the used electric car market, the growth in demand now that prices are more accessible shows that people are keen to try out an electric car – crucial if the price is right – and with potential. Savings on running costs currently £131 per 1,000 miles driven, it’s not surprising that more people are considering making the switch.’