Used electric vehicle prices drop below petrol and diesel

Demand for used petrol and diesel cars fell year-on-year by 0.5% and by 9.7% respectively, on Auto Trader in May.  

In contrast, demand for alternatively fuelled vehicles continued to increase, with hybrids and plug-in hybrids increasing 16% and 27% respectively. 

The biggest growth in consumer interest, however, continues to be seen in used electric cars, which in May increased 31% year-on-year fuelled by the ongoing softening in prices.

The average cost of a used electric vehicle (£24,370) fell by 7.4% year-on-year, while petrol and diesel car prices grew 0.5% year-on-year and 2%.

This disparity is even more pronounced with 3-5-year-old cars, with electric models at this age dropping by 11.6%, versus a 3.1% and 2.4% growth for used petrol and diesel cars.

As a result, a 3-5-year-old electric car is currently cheaper (£18,266), than a petrol of the same age (£18,731). 

The latest used car market data from Auto Trader also shows that demand for 1-3- and 3–5-year-old cars in May fell by 2.4% and 9.1% respectively.

However, consumer demand for used cars from 5-10 years and those more than 10 years old were up by 4.5% and 10.4% respectively.

As a result, these age groups are recording price increases well ahead of the wider market with the average price of a 5-10-year-old car rising 1.4% year-on-year (£13,705), and those aged more than 10 years old increasing by 2.6% year-on-year (£6,555).

Overall, the latest used market data shows that consumer demand, speed of sale, and transactions were all stable in May, while average retail prices followed seasonal trends.

According to Auto Trader’s Retail Price Index, the average price of a used car was £16,825, which marked the second consecutive month prices were flat on a year-on-year and like-for-like basis, following more than a year and half of price contractions.

Based on 800,000 daily pricing observations across the whole retail market, Auto Trader also revealed that retail prices had softened falling 0.7% month-on-month, a movement which is very much in line with seasonal norms.

Apart from the pandemic influenced 2020 and 2021, retail prices have dipped every May following an April increase since Auto Trader first began tracking retail prices in 2011. 

These pricing trends are indicative of a buoyant, albeit currently flat, used retail market, as well as an increasingly nuanced one, it said.

This is evident in the levels of consumer demand on Auto Trader, which based on the volume of searches and advert views, grew 1% year-on-year last month.

Used cars also continue to sell at an impressive pace. It took an average of 30 days for a car to sell last month, the same as May last year, but a day faster than in 2023.

For 5-10-year-old cars, it was even quicker with vehicles selling in just 28 days, faster than any other age cohort. Those aged 1-3 years old took longer, selling in 34 days. 

Marc Palmer (pictured), head of strategy and insights at Auto Trader, said: “Although a slight softening on the strong first quarter of the year, we’ve seen a flatter but nonetheless robust used car market so far in Q2.

“Retail prices are stable, demand is healthy, cars are selling at pace, and on our platform, we’re seeing huge volumes of highly engaged car buyers.

“For those retailers able to source sufficient quantity and quality of in-demand stock, this is proving to be a strong combination, with overall transactions ahead of where they were last year.

“The market may be very nuanced, but there are clearly areas of profit potential available, and so I’d urge retailers to make full use of the tools and data we’ve developed to spot the best opportunities for their forecourts.”

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