Used electric cars are defying the laws of depreciation

1y ago

24.6K

Depreciation is one of the most off-putting elements of car ownership, which is why many people shun the idea of buying new. But it appears that some used electric cars may actually be an investment. For now, anyway.

That is according to a report by HPI, which found that an electric bought a year ago could be sold for as much as 30 per cent more right now, even if you wracked up serious miles over that time.

A Renault Zoe, for instance, bought in July 2017 for £6,300 has gained £1,900 in value over 12 months. Not enough to retire, admittedly, but a profit is a profit.

A Peugeot Ion, meanwhile (pictured above), is said to be worth 21 per cent more than it was a year ago, at an average of £6,150, up from £5,075.

The third highest amount of appreciation, according to HPI, comes from the Citroen C-Zero, which jumped from £5,425 to £6,325 in a year, an increase of 17 per cent.

Sadly, a used Tesla still isn't that cheap to buy second-hand.

Sadly, a used Tesla still isn't that cheap to buy second-hand.

Even the Hyundai Ioniq Electric, which has only been with us since the tail end of 2016, appears to have grown in value by five per cent, going from £16,125 to £17,000. Bought new, prices started from £24,995.

Now you may be on the way to snap up a used electric car right this second, but there is no guarantee the same growth will happen again, as HPI head of current valuations, Derren Martin, explained:

"It is rare to see cars appreciate in value but the market is seeing an unusual combination of factors. We do have to stress that, just because these models have increased in value in the last year, it doesn't guarantee the same will happen again in the next 12 months."

So why the increase? Well, for one thing the UK government's attack on diesel has caused a fall in popularity at dealerships, which coupled with rising motoring costs and greater levels of eco-guilt has sparked an increase in demand for alternatives such as electric.

Going electric, particularly when buying a second-hand car, can actually save you money in the longer term as a full charge of the battery costs a few pounds for a small capacity battery, compared to £40 or more for a liquid gold top-up.

There is also the bonus of emitting zero harmful emissions locally, which is good for your lungs and those around you, and that electric motoring can be enjoyable. A combination of ample torque, punchy acceleration and near-silent cruising is usually pleasing.

Plus with a used electric car, the fear of battery degradation (something that seems to be a non-issue, as numerous high-mileage electric vehicles have shown) is counteracted by a low buying price and what should, in theory, be lower maintenance costs.

Buying second-hand also means avoiding the initial depreciation, which is emphasised by the fact that electric vehicles are typically more expensive to buy than an equivalent petrol or diesel. No wonder, then, people appear to be snapping them up.

You could, of course, equate some of the electric car value increase to rarity. There are, for example, said to be just 225 C-Zeros and 422 Ions in the UK. Even the Ioniq is a rare sight, with Hyundai having apparently sold a mere 389 of the electric-only variant.

Martin added: "The used car market is very strong at the moment and new car PCP offers, a key driver in the new market, are not as good as they were a year ago. Lower new car sales means there are fewer part exchanges available while demand for some small cars remains high."

So the moral of the story? That for motorists who do lots of short journeys, a used Nissan Leaf or similar could actually be a wise investment. Although you may want to strike quickly, before they appreciate even more.

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