Surge In Used EV Sales Drives Growth In The Used Car Market
Giancarlo Perlas May 30, 2023The automotive industry in the UK is not merely predicated on the success of vehicle manufacturers like Mercedes-Benz and showrooms. It is a dense and diverse network of businesses and trades, from the designers on one side of the industry to the second-hand dealerships on the other – which together account for a near-£70 billion industry.
Indeed, the health of the second-hand car market in the UK can be a useful thing to track regarding the health of the wider industry. It has reflected some of the key challenges facing the industry in recent years, with sales spiking through the microchip shortage of 2021 and slumping with the result of hikes in value. In recent months, the used car industry has rallied, experiencing significant growth fuelled largely by an increase in sales of used electric vehicles (EVs).
How Did the Used Car Market Fare in 2022?
The year 2022 saw the used car market face some major challenges, and suffer a major slump as a result. According to recent statistics and used car sales data, the UK market experienced a decline in sales volume, to the tune of 640,000 fewer than in previous years. Numerous factors were demonstrated to be at play, including ongoing supply chain disruption brought about by the enforcement of the Brexit withdrawal agreement.
Changes in consumer preferences also contributed to this decline. However, this change also precipitated the bounce-back, as the rise of used EV sales played a crucial role in boosting the overall performance of the used car market.
Rise in Used EV Sales
EVs have been present for over a decade, but have only been a mainstay in the automotive industry in the past five years. This is because research and development have caught up to consumer standards, and new EVs are now capable of standing beside conventional vehicles. With development cycles stabilising, the used market has started to receive serviceable second-hand models – for which consumers are willing to fork out.
The environmental benefits and lower running costs associated with EVs have been attracting buyers from the outset, leading to a rise in demand. With demand now being met in both showrooms and used dealerships, the trend has breathed new life into the used car market.
Affordability of Used EVs
One of the key defining factors contributing to this upturn is the affordability of used EVs. Though EVs remain valuable investments, for which buyers are wise to opt in for gap insurance, used EV prices have become more competitive, making them increasingly affordable for prospective buyers.
Technological advancement is the major factor to thank for the upwelling of used EV availability, and for the fall in price; as improved battery and sensor technology becomes easier to mass-produce, affordability increases too. This affordability factor has attracted a broader range of buyers, expanding the customer base in this corner of the automotive industry and resulting in wider public interest in EVs as a concept.
