Electric vehicles - the effect on the used car market
Electric vehicles (EVs) are beginning to make their presence known in the used car market and with new EV sales up by around 20% last year and many manufacturers now working to introduce new EV vehicles, the market is set to expand rapidly.
Data specialists Cap HPI, reveal that demand for used electric and hybrid vehicles is increasing. This rising demand is also clear from the search activity of the growing number of motorists using fundandfundmycar.com. It is further supported by an average 0.3% rise in residual values at three years/60,000 miles reported by Cap HPI and news that in January, while used car values fell by 0.7% (ahead of the long-term seasonal trend of -0.4%), EV values increased*.
The Vehicle and Remarketing Association (VRA) is already preparing its members for a greater impact of EVs and these vehicles will eventually be looking for new homes.
The association told its members that the small numbers up until now has meant used EVs were nominal and tended to be dealt with by dealerships which either sold EVs new or had specialised relatively early in EV sales and servicing, this is all that’s set to change. With multiple new and upgraded models to be launched this year, it is clear that increasing numbers of EVs will find their way into the used car market. This will mean change in the showroom and online.
Inevitably, even allowing for the range of online resources, many motorists will have questions about the implications of going electric, dealers need to be prepared to provide answers.
For businesses which don’t have experience selling EVs, it will be a question of educating sales staff and even investing in training for technicians. Although EVs require less servicing, as they have fewer moving parts, the risks and hazards involved in maintaining EVs makes additional technician training necessary safety precaution. The IMI offer training for all technicians who have reached level 2 in vehicle maintenance and repair or two years’ practical experience in vehicle diagnostics and repair.
Equally, sales staff may need additional training to understand EVs and how to ascertain whether an EV is suitable for a customer. Businesses could consider taking advantage of the Milton Keynes-based EV Experience Centre where visitors can learn about and test drive a variety of EV models. Part of Milton Keynes Council’s Go Ultra Low City scheme, it forms part of its approach for 23% of new car sales in the local area to be EVs by 2022*.
Dealers should be ready to take a different approach with potential used EV buyers including understanding an individual’s typical daily car journeys. EVs are ideal for short trips around town, for example, but as yet, they may not provide the range and convenience for regular long haul motorway driving. Another consideration has to be establishing whether customers have access to a garage or off-road parking to install a charging point. They will also need to be ready to handle questions on the all-important battery; including charging times, battery warranties and potentially the availability of charging points, most especially in the local vicinity.
Dealers seriously considering used EV sales, and already some independents have identified them as a niche opportunity, should consider installing a charger or at least know the location of the nearest charging point so they can demonstrate the practicalities and ease of EV charging.
Whilst the appeal of the government grant for new* doesn’t apply to used vehicles, zero-emissions driving and the introduction of ‘clean air zones’, which are set to be introduced in towns and cities across the UK, will help to make buying a used EV attractive. It is also worth noting that there are incentives to help cover the cost of home charging installations with up to £500 available.
If an EV suits a customer’s lifestyle, then there’s every reason for a customer to consider it. When they do, you can be reassured that MotoNovo Finance will be ready to help.
Sources:
* AM Online: vras Janurary meeting to focus on electric and hybrid vehicles
* AM Online: Electric vehicles experience centre opens in Milton Keynes
* Insideevs - Plug-In Electric Car Sales In UK
EV/Hybrid Demand - https://www.fleetnews.co.uk