Electric car demand driving sales (apparently)

[DrFfybes]

Or at least that's what the SMMT are suggesting...

https://www.bbc.co.uk/news/business-61383855

"Electric models drive second-hand car sales higher"

Second-hand car sales have risen this year, boosted by a sharp increase in the number of used electric vehicles on the market.
Sales of used cars in the UK rose 5.1% between January and March, compared to the same three months last year.
But the market for electric cars, which only makes up a small percentage of the overall second-hand market, more than doubled in size.


However the actual report..
https://www.smmt.co.uk/2022/05/used-car ... grows-5-1/

Says that of the 1,774,351 vehicles changing hands in the first quarter, 14,586 were BEVs.

That's 0.8% of the market. OK, up from 0.4% of the market last year, but still effectively bugger all and hardly driving sales higher. Hybrids made up a further 1.7%. The thing is, these cars are only just entering the used market as leases expire, it is balatantly obvious that there will be more of them being sold. In fact in the absence of more information (eg the number of used BEVs available could have risen 5 fold) one could argue the opposite is happening, the percentage of BEVs is too low as people avoid used BEVs over battery life concerns.


What I don't understand is this... if there are fewer new cars available, surely there would be fewer second hand car sales as the new buyers hang on to their current models, even if "end of lease" baloon purchases are counted, there still needs to be new cars entering the market.

Paul

[pje16]

5% isn't that much
and after all comparing it with a (semi) lockdown period is always going to make it look favourable

[Mike4]

Or at least that's what the SMMT are suggesting...

https://www.bbc.co.uk/news/business-61383855

"Electric models drive second-hand car sales higher"

Second-hand car sales have risen this year, boosted by a sharp increase in the number of used electric vehicles on the market.
Sales of used cars in the UK rose 5.1% between January and March, compared to the same three months last year.
But the market for electric cars, which only makes up a small percentage of the overall second-hand market, more than doubled in size.


However the actual report..
https://www.smmt.co.uk/2022/05/used-car ... grows-5-1/

Says that of the 1,774,351 vehicles changing hands in the first quarter, 14,586 were BEVs.

That's 0.8% of the market. OK, up from 0.4% of the market last year, but still effectively bugger all and hardly driving sales higher. Hybrids made up a further 1.7%. The thing is, these cars are only just entering the used market as leases expire, it is balatantly obvious that there will be more of them being sold. In fact in the absence of more information (eg the number of used BEVs available could have risen 5 fold) one could argue the opposite is happening, the percentage of BEVs is too low as people avoid used BEVs over battery life concerns.


What I don't understand is this... if there are fewer new cars available, surely there would be fewer second hand car sales as the new buyers hang on to their current models, even if "end of lease" baloon purchases are counted, there still needs to be new cars entering the market.

Paul

I think the balancing arithmetic will be happening at the other end of the market. Cars in a poor enough condition to have warrant scrapping previously, are now being repaired and kept on the road.

This is certainly happening with canal narrow boats. No matter how old and poor the condition, they are being sold and done up instead of being scrapped such is the insatiable demand for boats and only a small number of firms out there geared up to build new ones.

[scotview]

We purchased a new VW ID3, 8 months ago.

The purchase cost was £26500, the PCP starting sum was £20664 after a generous trade in allowance.

Our outstanding PCP capital is £19196 ........BUT the current trade-in value of the car is astonishingly £31800, quoted by VW and We Buy Any Car.

[DrFfybes]

We purchased a new VW ID3, 8 months ago.

The purchase cost was £26500, the PCP starting sum was £20664 after a generous trade in allowance.

Our outstanding PCP capital is £19196 ........BUT the current trade-in value of the car is astonishingly £31800, quoted by VW and We Buy Any Car.

The current ID3 starts at £36k, and it didn't take much effort to spec one over £40k (which IIRC means you'd pay VED).
"Drive away today" price on Autotrader is £35-38k for one under 12 months old. It used to be only selected BMW/Porsche/Ferrari models that made money flipping them.

It's not just BEVs though, then entire UK allocation of the new Toyota GR86 (the replacement for the GT86) sold out in under 45 min last week.

Paul

[Hallucigenia]

Meanwhile at the other end of the market :
https://www.ft.com/content/96b7acaf-798 ... 0aa4ca20d4

Volkswagen, the world’s second-largest electric vehicle manufacturer by volume, has “sold out” of battery-powered models in the US and Europe for this year as persistent supply chain bottlenecks hit global production.

The Wolfsburg-based group, which includes brands such as Porsche, Audi and Škoda, sold more than 99,000 electric models worldwide in the first three months of 2022 as it was hit by a shortage of semiconductors and wiring harnesses made in Ukraine.

And just wait until the lithium shortage hits in 2-3 years....

[AF62]

What I don't understand is this... if there are fewer new cars available, surely there would be fewer second hand car sales as the new buyers hang on to their current models, even if "end of lease" baloon purchases are counted, there still needs to be new cars entering the market.

Paul

Presumably you mean ‘end of PCP finance balloon purchases’ as you normally can’t buy the car at the end of a lease.

And perhaps the answer to the question is -

1. When leases end the car has to go back irrespective and if there isn’t a new car to lease then you have a second hand sale without a new purchase for a new lease.

2. People who were commuting to offices and are now working from home have decided they don’t need an expensive lease if they are not doing the miles and can go from two cars to one.

3. A new car can only be sold once to count in the statistics, but a used car can be sold several times a year and counts each time.

[Howard]

What I don't understand is this... if there are fewer new cars available, surely there would be fewer second hand car sales as the new buyers hang on to their current models, even if "end of lease" baloon purchases are counted, there still needs to be new cars entering the market.

Paul

Presumably you mean ‘end of PCP finance balloon purchases’ as you normally can’t buy the car at the end of a lease.

And perhaps the answer to the question is -

1. When leases end the car has to go back irrespective and if there isn’t a new car to lease then you have a second hand sale without a new purchase for a new lease.

2. People who were commuting to offices and are now working from home have decided they don’t need an expensive lease if they are not doing the miles and can go from two cars to one.

3. A new car can only be sold once to count in the statistics, but a used car can be sold several times a year and counts each time.

I lease our cars and, despite the common belief, I have found it is easy to buy a car at the end of the lease if one approaches the leasing company.

For example, see "AT THE END OF THE LEASE YOU COULD BUY YOUR ARVAL VEHICLE " at https://www.arval.co.uk/customer-suppor ... al-vehicle.

I did consider buying my current car and got a quote. Unsurprisingly the purchase price was very high but ironically the cost of extending the lease for a further two years was a bargain, and a reduction on the cost for the first three years so I've just carried it on.

regards

Howard

[redsturgeon]

With the current state of the market we have decided just to carry on with our now six year old PHEV BMW. We usually bought new and replaced at three years but when I looked at the cost of a new BEV and the availability it just did not make sense.

We also run a 15 year old Hondas Accord diesel for motorway business trips, just done over 100,000 miles and still runs a sweet as a nut and gives 55mpg+. Done 30,000 miles in it since August last year at changed oil three times and put two tyres on it and that's it. Honda know how to build cars! Slightly guilty at the ecological impact but I don't drive it in the city and I guess that driving it rather than replacing it is actually an eco benefit overall.

John

[Mike88]

I'm surprised that there are many second hand electric vehicles on the market unless of course they are dealer demonstrators. More likely people have got fed up with finding suitable charging points and points that actually work. Those I have seen on motorway service areas either don't work or are hogged by staff members of the concessions who work in the service areas. Reading a few forums I have gained the impression that electric vehicles are great for those who do short journeys but for anyone else they are a recipe for anxiety.

[Hallucigenia]

I'm surprised that there are many second hand electric vehicles on the market unless of course they are dealer demonstrators. More likely people have got fed up with finding suitable charging points and points that actually work.

There will be quite a lot coming off lease by now. I think you'll find that most people who are buying BEVs at the moment hardly use charging points, they just charge at home. I know someone who used a charging point once in 2 years, just to see how it worked in case they needed it - and they were doing over 20k miles per year.

It's easy to focus on the edge cases but there's an awful lot of Zoes and Leafs being used just for commuting and the school run, as a household's second car. There was a US study a decade ago that reckoned that even in the land of the car, 90% of cars never went more than ??200?? miles in a day. Couple that with the ~70% of households who have access to off-road parking and there's 50-60% of cars which have off-road parking (so potentially could charge overnight) and never go far enough in a day to need to charge anywhere but home. Yes, there are issues with the edge cases, but there's a lot of people for whom that's not relevant.

Considering that as the owner of a petrol car, I've had to cancel journeys in the last year because I couldn't find a petrol station "that actually worked", I'm not sure your argument is as strong as you think it is.

[Howard]

I'm surprised that there are many second hand electric vehicles on the market unless of course they are dealer demonstrators. More likely people have got fed up with finding suitable charging points and points that actually work. Those I have seen on motorway service areas either don't work or are hogged by staff members of the concessions who work in the service areas. Reading a few forums I have gained the impression that electric vehicles are great for those who do short journeys but for anyone else they are a recipe for anxiety.

We have an electric KIA with a range of between 250 and 300 miles depending on how it's driven. We had to drive into outer London yesterday for a return journey of just under 150 miles. Traffic coming home on the South Circular at 5 pm was at a standstill much of the time.

It was a delight to drive! The car started off with a range of 260 miles indicated and this dropped fairly quickly at 70 mph for the first three quarters of the journey. But once in London traffic the car uses hardly any electricity. Every stop or slowing down charges the battery. The car's technology matches the speed of the vehicle ahead and as a driver it's relaxing.

When we got home, having hammered back on the dual carriageway the car showed exactly 50% charge left.

So, for someone who can charge a BEV at home to 100%, fairly long journeys are a delight and heavy traffic is much more relaxing than in an ICE car.

However, we are fortunate that we have an ICE car as well. We went to Cornwall for a break and for a 500 mile return journey mostly on motorways, the petrol engined car with a range close to 700 miles was the obvious choice. But this was the first time in two years that we'd driven this far from home.

regards

Howard