In one of the surprise turns of events, used electric cars (EVs) have turned cheaper than their petrol or diesel counterparts. Based on the data available from Cap HPI, a used electric car costs an average 8.5% less than its analogous gas-powered variant after three years. The price difference increases to 14% when an EV is four years old. Since the overall EV technology and consumer preferences are changing rapidly, with a certain amount of skepticism toward mass adoption, the value of older models is affected, causing the prices to significantly decrease.

Why Are Used EVs Cheaper?

The high rate of depreciation is one of the main reasons for a used EV to cost less. A car, especially an electric one, starts to depreciate very fast at the moment it is bought new. For instance, an electric car may cost a tick below heaven when bought new, and its value gets halved over two years. That often makes a used EV a real bargain, quite cheaper than the ones powered by petrol or diesel.

A glance at the figures illustrates how this works in practice. Taking something like a three-year-old Vauxhall Corsa Ultimate, with 36,000 miles, would set you back about £9,925 were it a petrol version. By contrast, the electric version is about £8,750 in value, despite being £6,000 more when new. This simple pricing difference puts across the sorts of savings you might save with a used EV over a petrol car.

Not all used EVs are unrivaled bargains compared to their petrol counterparts. Some models keep their residual value better than others. As a result, a used Hyundai Kona Electric might cost almost the same amount as one running on petrol or in some mild-hybrid configuration. Conversely, luxury models like the BMW i7 actually hold value better than the BMW Series 7 in plug-in hybrid form, but both suffer acutely from high depreciation.

Growing Demand for Used Electric Vehicles

According to Chris Plumb, an electric vehicle expert at Cap HPI for used EVs, the interest is high because the second-hand models available are now more than ever. Some of the interest is driven by the desirability of reducing the effects on the environment and also cutting costs because of the high fuel costs from diesel and petrol vehicles. Awareness over issues of climate change with increasing fuel now has made used EVs the talk of the buyer.

Government and Policy Changes

In its pre-election manifesto, the Labour Party promised to further the use of used electric cars by implementing a standard framework for information provision about EV batteries. This framework, potentially through an EV battery passport, will allow buyers to scan a QR code that will give them details about the car’s battery, including its environmental impact and state. It means that it could increase the confidence for getting used EVs.

Challenges Used EV Adoption Faces

Used EVs are more affordable but also come with their fair set of challenges. The first of these, of course, is high insurance costs. The EV insurance premiums are on average 54% higher when compared to petrol or diesel-powered vehicles, as per Quotezone. The reason is that sometimes, replacement parts for EVs are expensive and hard to find time-to-time. Few technicians are trained in repairing electric vehicles too.

Other more pressing issues are the lack of affordable public charging for those without driveways, a problem the Labour Party aims to help ameliorate with more specifics on how and where to install new EV charge points, and by re-implementing this 2030 ban on the sale of new petrol and diesel vehicles. This, too, should help to boost the used EV market since so many people are switching to electric vehicles.

Future of Used EVs

The used EV market can only glide in one direction as more people get wind of electric cars both from the environmental impact and savings angle. The reduced purchase price of used electric cars, along with ongoing efforts to improve charging infrastructure and reduce the insurance cost, could make it even more attractive in the future.

In short, due to heavy depreciation and a rising number of second-hand models on the market, nowadays used electric vehicles are priced lower than gasoline or diesel cars. Although there are still hurdles to be overcome, such as high insurance prices, more public charging locations, and the provision of used EVs, the trend looks positive for lower prices and increased interest among consumers.