Used electric cars are now cheaper than their petrol equivalents, according to a ground-breaking new report by market experts.
Average retail prices for electric vehicles are 8.5 percent cheaper than gasoline by year three, and rise to almost double by year four, according to valuation specialists Cap Hpi.
This means that used car buyers have more reasons than ever to go green, especially as running costs are also lower than an equivalently aged model powered by an internal combustion engine.
The groundbreaking report comes as used electric vehicle sales rose more than 50 percent between April and June this year compared to the same period in 2023.
Average retail prices for electric vehicles are 8.5 percent cheaper than gasoline by year three, and rise to almost double by year four, new data from Cap Hpi shows
New electric vehicles are generally significantly more expensive than new petrol or diesel cars – drivers can typically expect to pay a premium of between £5,000 and £10,000 to choose the battery-powered option.
But because electric vehicles are depreciating more quickly, prices have fallen dramatically over the past two years to the point where motorists can now buy a second-hand electric car at an affordable price.
HPI data indicates that average retail prices of EVs at the three-year point are around 8.5 percent cheaper than gasoline and diesel vehicles, rising to 14 percent at four years.
And used EVs represent huge savings over the price of new ones: On average, used EV values for cars of the same age and mileage have been cut in half since September 2022.
Add up those savings for models like the Jaguar i-Pace, Mercedes EQC and Tesla Model X and this could equate to more than £20,000 less than in summer 2022.
A Porsche Taycan can cost twice as much and up to £40,000 less than it did two years ago.
Cars that were previously out of reach and unattainable for many buyers may suddenly fall within their budget range.
Chris Plumb, EV specialist at HPI, said: “The increasing availability of second-hand electric models is driving demand as drivers look to reduce their environmental footprint and make significant savings on driving costs due to high diesel and petrol prices.”
The used electric vehicle market is experiencing a surge in sales
Some 46,773 used fully electric vehicles found new homes in the second quarter of this year, a year-on-year increase of 52.6 per cent, the latest figures released by the Society of Motor Manufacturers and Traders (SMMT) show.
Electric vehicles still account for just 2.4 percent of the used car market, but this is the highest share ever and up from 1.7 percent in the same period last year.
SMMT chief executive Mike Hawes said it was “encouraging” to see the market continuing its recovery, adding that greater choice and affordability had been achieved thanks to a “rejuvenation” in demand for new cars.
EV price parity achieved after three years: the popular time to buy a used EV
When is an EV better value for money than an equivalent petrol model? At This is Money we compare the depreciation of similar vehicles to find out when an EV will be more beneficial for your bank account. Take a look at our comparisons here
Auto Trader data puts price parity between battery electric vehicles (BEVs) and petrol models within three years, although new EVs typically cost a third (33 per cent) more than an equivalent new combustion car, according to used car market data.
The platform has seen a sharp increase in demand for three-year-old EVs: in June, electric cars between three and five years old sold a week faster than the rest of the market (22 days compared to 29 days respectively).
Searches for EVs in this age group increased a whopping 175 percent year-over-year in June, while searches for EVs by all ages increased 70 percent overall.
This outpaces searches for used ICE cars, with searches for petrol down 9 per cent and diesel down 10.5 per cent.
Richard Walker, data and insights director at Auto Trader, compared a Tesla Model 3 to a BMW 3 Series and a Jaguar I-Pace (both petrol): in June, the average price of a three-year-old Model 3 was £22,400, while a 3 Series of the same age was almost £2,000 more expensive (£24,300).
‘A three-year-old Jaguar I-Pace EV cost £23,400, while the petrol-powered F-Pace was more than £10,000 more expensive (£33,500).’
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