Currently reading: Used electric cars and hybrids surge in popularity
Plug-in cars claim a bigger proportion of the second-hand market amid a slight overall decline

Sales of second-hand electrified cars are on the rise in the UK, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

Despite a slight year-on-year overall decline in used car sales last quarter (largely the result of a boom this time last year as dealerships opened post-lockdown), the popularity of used electric and hybrid cars continued to grow.

A total of 14,182 plug-in hybrids changed hands last quarter, a 43.3% year-on-year rise, while sales of pre-owned battery-electric cars surged 56.4% to 14,990 units - the highest quarterly tally on record.

The SMMT attributes the hikes to "an ever-growing choice of new zero-emissions models coming on sale, for both new and used car buyers". Overall, plug-in cars now account for 1.4% of the used market, up from 0.9% this time last year. 

Meanwhile, conventional petrol and diesel powertrains continue to dominate the market, accounting for 96.4% of all second-hand car transactions last quarter, although demand for each declined by 6.9% and 7.6% respectively, in line with a wider downward trend in the used market.

A total of 2,034,342 used cars changed hands last quarter, 134,257 fewer than in the same period last year. The SMMT notes that figures were particularly strong in the third quarter of 2020, however, as the easing of lockdown measures had "the market bounce back strongly". 

The South East of England was the busiest region for used car sales, with 292,049 taking place, followed closely by the North West, West Midlands and East. Scotland recorded 166,941 used car sales, while 107,315 cars changed hands in Wales.

SMMT CEO Mike Hawes noted that record sales in the second quarter cancel out the recent decline, so "the market remains up year to date". 

But he added: "Given the circumstances, with the global pandemic causing a shortage of semiconductors needed to produce new vehicles, undermining the new car market, used transactions were always going to suffer too. This is particularly worrying as fleet renewal – of both new and used – is essential if we are to address air quality and carbon emissions concerns."

Felix Page

Felix Page
Title: News and features editor

Felix is Autocar's news editor, responsible for leading the brand's agenda-shaping coverage across all facets of the global automotive industry - both in print and online.

He has interviewed the most powerful and widely respected people in motoring, covered the reveals and launches of today's most important cars, and broken some of the biggest automotive stories of the last few years. 

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Soren Lorenson 9 November 2021

This is doing extraordinary things to residual values. I bought a Mitsubishi Outlander PHEV two years ago.  If I bought the same car today it would cost me more, despite being two years older and having another 15,000 miles on the clock.

Scribbler 9 November 2021

The percentage increases look impressive. However, the actual numbers of used PHEV and BEV cars sold are still low.

I still believe the following about most, if not all, of the BEVs currently on sale:

  • There will be jumps in battery technologies in terms of different approaches to designing and building batteries and consequently jumps in range and performance. Equally, the cost of battery packs and thus the overall cost of new BEVs should start to decrease, which will affect perceptions and residual values of the curret crop of BEVs as they start to age. A relevant analogy is customer electronics, such as mobile phones, where upgrade cycles are frequent and older models lose their value sharply.
  • The lifespan and replacement costs of battery packs and electric motors in BEVs will come into sharper focus as a larger number of the current BEVs reach eight plus years of age and move out of manufacturer or extended warranties. In particular, battery packs are very expensive and have the potential to make a car uneconomic to repair if insurance or warranty cover are not applicable. I'm not sure that most people would want to own a BEV "out of warranty", which will probably affect how the used market for BEVs will operate.

Therefore, despite the current concerns about petrol and diesel prices and availability (in the UK, at least) and the plans to stop sales of new ICE cars from a certain point, I am not sure that most drivers should or will move to BEVs this side of 2030. There are too many variables.

Soren Lorenson 9 November 2021

Absolutely right. You would be insane to buy a new electric car with your own money. I suspect that almost all of them are bought on PCP or contract hire, especially as company cars, as they make a lot of sense.

All it takes is for one major battery innovation to come along, and your 2021 EV, is going to look like a Ford Anglia.

Scribbler 9 November 2021

Indeed. Arguably, the BMW i3 and i8 are good examples of how residual values of PHEVs and BEVs can soften or keep falling significantly becuse of (a) changes in technology or consumer demands and (b) perceptions of the car-maker and whether it is losing ground to rivals for "electrification". Admittedly, the I3 has a quirky design and is not as practical as rivals but its "pedestrian" range makes it a difficult sell. The i8 seems to be an expensive car to fix and maintain, which does not help with residuals.

That said, looking at some of the more recent BEVs launched over the last two years, it is interesting that many car makers have not learned the lesson from the i3 about avoiding quirky designs.

bol 9 November 2021
Scribbler wrote:

Indeed. Arguably, the BMW i3 and i8 are good examples of how residual values of PHEVs and BEVs can soften or keep falling significantly becuse of (a) changes in technology or consumer demands and (b) perceptions of the car-maker and whether it is losing ground to rivals for "electrification". Admittedly, the I3 has a quirky design and is not as practical as rivals but its "pedestrian" range makes it a difficult sell. The i8 seems to be an expensive car to fix and maintain, which does not help with residuals.

That said, looking at some of the more recent BEVs launched over the last two years, it is interesting that many car makers have not learned the lesson from the i3 about avoiding quirky designs.

The cheapest i3 on auto trader is a 2014 with 77k miles for £12.5k. Cheapest BMW 320d (similar list price) with the same age and miles is £10k. I3 depreciation doesn't look bad to me in that context. There is a lot of cobblers talked about EV tech and battery life on these pages. Time will tell, but I think the smart money (as well as the money of people who give a toss about the world) is in EVs now. There will be no more of a sea change in battery tech over the next 10 years than there has in ICE in the last 10. Does the fact that most affordable new cars have three cylinder turbo engines now prevent someone from buying a 10 year old 4 cylinder normally aspirated car in their price range? Of course not. 

Scribbler 10 November 2021

RE Autotrader car ads:

  • The i3 you highlighted has probably depreciated by £20K over the last 7 years and its 8-year/100,000-mile battery warranty will expire next year. That car's market value will probably drop sharply as soon as that warranty expires. Whoever buys that car now will need to consider that in terms of repair costs and future resale value. It's possible that the current cost of the replacing the car's battery pack exceeds its current sale price.
  • I'm not sure why you draw a comparison between that i3 and a BMW 320d from the same year and with a similar mileage. Diesel car sales and residual values in the UK have softened because of the VW scandal. Equally, your average EV car buyer is quite different from your average diesel car buyer. You are comparing apples and pears.
  • A more interesting comparison is between that i3 and any Nissan Leafs in Autotrader from the same year. Although they are not direct rivals, they are contemporaries and were often reviewed together in group tests. It's interesting that although the i3 is supposed to be more "premium", most of the Leafs from the same year are only about £2K less than the i3.

RE EV battery tech:

  • Although lithium ion is the predominant battery chemistry currently used, there are different implementations of it, each with different safety ratings, costs, and performance. 
  • Equally, different design choices, such as 400V versus 800V, can produce different outcomes in terms of battery heating and cooling and charge times.
  • In the years to come, more battery innovations are expected, and I suppose that economies of scale and convergence of standards will happen eventually.
  • Thus, not all EV batteries and consequently not all EVs are created equal.
  • The ICE comparison you make is not relevant because for several years now many volume car makers have stopped or at least reduced R&D investment in ICE drivetrains so that they could fund R&D and retooling for EV (and autonomous) cars. Indeed, some car makers plan to stop making ICE cars long before 2030.

So, although the "smart money" might well be in EVs, the path ahead for car makers and car buyers will be interesting and perhaps uncertain at times.

LP in Brighton 9 November 2021

Good news if you already have one or are in the process of buying new. But it would not encourage me to buy used: why pay an inflated price for a secondhand inferior spec model? 

Just wait until supply matches demand and the bargains will surely return!