A new white paper into the UK used car market has revealed a dramatic fall in EV prices compared to their petrol and diesel counterparts.
The INDICATA Market Watch has looked at the supply and value of used cars in the UK from 2020, and considered where prices will go in the coming few years.
Its data found that the UK used car market has been significantly more volatile than the rest of Europe since the pandemic struck, with prices remaining comparable until the second quarter of 2021 when they surged by 27% in the UK. Price escalations continued through the year, peaking in the second quarter of 2023 with a 41% uptick. This compares to a 25% rise in prices in Belgium, which was the second highest across European markets.
However, that represented the top of the curve and prices since then have been decreasing, with current trends suggesting used car values will fall by a further 27% in 2025 to return to pre-Covid levels.
Looking at the used car market by fuel type, BEV prices peaked in the third quarter of 2022 due to a shortage of semi-conductors but since then they have been on a continuous downwards spiral. This has partly been driven by a greater volume of used BEVs coming back into the market after two and three-year personal finance, leasing and salary sacrifice contracts.
Demand has not kept up with increased supply, leading to a 20% fall in prices in just six months during 2023. As a consequence, used EVs began 2024 more than 42% cheaper than both used petrol and used diesel cars.
The fall in UK used BEV prices has slowed dramatically since January, falling by just 1.3%, but with OEMs striving to meet the ZEV Mandate targets and more Chinese manufacturers flooding the market, INDICATA suggests that EVs will struggle to maintain price parity with ICE models.
Dean Merritt, INDICATA UK’s Head of Sales, said, “Price parity is vital for BEVs in the used market as consumers are now being offered all the latest fuel types at similar prices, where before used BEVs were commanding a 25-30% price premium which put buyers off going electric. In some cases, used BEVs are now cheaper than their equivalent ICE models.”
