Used car specialists have called for government support for second-hand electric vehicles as hefty price drops mean some dealers are no longer stocking them.
The Vehicle Remarketing Association (VRA), which is made up of senior executives from the sector, claimed there is an “imbalance” in government incentives between new and used EVs and “more needs to be done to ensure a healthy market for the latter”.
Values have been falling for months and some retailers have stopped buying used EVs, while others have never stocked them.
“Over a third of franchise dealer groups don’t have a used EV for sale [and] many have a used buying ban on battery-electric vehicles… since the price drops,” said VRA chair Philip Nothard.
Fleet and business buyers accounted for 66.7% of new battery-electric vehicle registrations in 2022 and 74.7% of their volume gain. Nothard said the perks – 2% benefit-in-kind tax – were weighted to that group and lacking for used car buyers.
He said: “The leasing and contract hire sector… is where the tax benefit is. What you’ve also got within that is a driver who doesn’t really care, because it’s not their car. It’s not their money. It’s someone else’s.
“The general customer in the used vehicle marketplace… what’s their incentive? We’ve got the energy crisis, we’ve got public infrastructure challenges and, in the main, it’s more costly to get a used battery-electric vehicle than it is one with a combustion engine.”
The number of second-hand EVs are rising. Market analyst Cap HPI said they made up just over 1.3% of all the used car transactions it recorded in 2022 – up around 0.5% year on year. For vehicles up to three years old, the same figure was 8.5%, up 2.1% year on year.
“One leasing company I spoke to said they will have a 50%-EV fleet by next year,” said Nothard. “Seventy per cent of their orders are EVs now, so they are very quickly becoming the dominant share of new registrations.”
A government subsidy for used electric cars already exists in Scotland. It offers an interest-free loan of up to £30,000 towards the purchase of a used electric car or van, or up to £5000 for an electric motorcycle or moped.
According to data from the Energy Saving Trust, which manages the loans, Scottish local authorities issued used EV loans of £16,700,617 to private buyers and £1,550,590 to businesses between the scheme’s October 2020 launch and the end of 2022.
It was closed to new applications at the time of writing, but a Transport Scotland spokesperson said it is “not unusual for our loan schemes to close towards the end of the financial year” and added that “grants for 2023/24 will be confirmed in the new financial year”.
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