How many times have you heard the words ‘electric cars are the future’? No matter where you look, it’s clear that EVs are beginning to dominate the new car market. It’s not just because of the UK’s proposed ban on new petrol and diesel car sales, either: there are so many advantages to electric car ownership. The quiet and serene driving experience, for starters. The array of onboard gadgets. And, of course, the fact that there are absolutely zero tailpipe emissions.
It’s not hard to argue that EVs are enjoyable to live with and that they’re a good thing for the planet – the advantages are clear. But few would contend that EVs are more affordable than their petrol and diesel counterparts. Historically, both EVs and hybrids have been consistently more expensive than conventional ICE (internal combustion engine)-powered vehicles, and this remains the case in the new car market.
Cast your mind back to when the first flatscreen LCD TVs came out, or the first games consoles. Back then, these now widespread items were new technology, and their price reflected that. Nowadays, they’re much more attainable – and we’re seeing a similar situation unfold with electric cars.
Although new EVs are still pricier than their more traditional petrol and diesel-powered counterparts, this gap is closing – and on the used market, EVs are now more affordable than they’ve ever been. Which brings us onto the topic of today’s article: just how affordable are used EVs in 2024?
We’re going to answer that question comprehensively below, explaining why prices are falling and what this might mean for the future of the electric used car marketplace. Then, we’ll run through a handful of the most affordable electric cars to help you join in the EV revolution without breaking the bank.
Prices are falling
The main thing you need to know is that, as of right now, the prices of used electric cars are falling. This doesn’t apply to every make and model – there are plenty out there that still command a hefty premium – but broadly speaking, second-hand EVs are the cheapest they’ve ever been.
According to Cap HPI, one of the UK’s leading car valuation specialists, three-year-old electric cars are now 8.5% cheaper than their equivalent petrol or diesel models – a shocking statistic considering the opposite is usually true. When vehicles reach four years old, the average price difference widens further still to 14%.
The surprising statistics don’t end there. According to Cap HPI’s data, used EVs are worth half of what they were in 2022 on average. Even pristine, low-mileage examples are worth considerably less than they would have been just two years ago.
Keep in mind that, on the new car market, electric models are nearly always more expensive than equivalent petrol or diesel cars. So, why is the opposite true on the second-hand market?
Why are electric cars getting cheaper?
This is yet another straightforward case of supply and demand. Chris Plumb, Cap HPI’s EV valuation expert, told Autocar magazine: “Every month we’re setting new records on the monthly volumes of EVs that are coming into the market, which isn’t a surprise, because everything comes back to the new car registrations from three or four years ago.”
Essentially, new EV sales exploded around the time Covid-19 hit, with the majority of buyers choosing three or four-year lease periods. Now those lease periods have come to an end, there’s only one place for the cars to go: the used market.
A huge influx of used EVs coming onto the market at the same time has resulted in supply outstripping demand – and if there aren’t enough buyers out there, dealers are forced to slash prices in order to shift all the second-hand EVs currently occupying their forecourts.
The incentives many manufacturers offer on brand-new EVs are only compounding the situation on the used market. Because new models are becoming increasingly affordable (especially on PCP or PCH contracts), second-hand models are less attractive than they would otherwise be.
Will used EVs go up in value again?
So, there’s an imbalance between supply and demand and a load of new vehicle purchase incentives which are currently suppressing the used EV market. If these factors were removed from the equation, would second-hand EVs jump up in value once again?
Probably, yes. If the Government (and manufacturers) gradually began withdrawing the incentives they’re currently offering new car buyers, second-hand models would immediately become more attractive because of the difference in price. Plus, as more and more motorists make the jump from ICE cars to EVs, demand for more attainable used models is only going to increase.
“I don’t think there has ever been a better time to buy an EV, because of the new car discounts that we’re seeing and how much value for money that going used offers,” Plumb told Autocar.
“Some of these vehicles can’t get any cheaper, so we might find that they increase in value over time as consumer demand increases.”
Should I be concerned about residual values?
With the apparent volatility of the used EV market in mind, should you be worried about residual values when buying an electric car – be it new or used?
At this point, it’s hard to say. We expect the used EV market to bounce back and stabilise once again, but it’s difficult to predict how long this will take. As we get nearer to the UK Government’s proposed ban on new petrol and diesel cars (which has been pushed back from 2030 to 2035), more and more motorists are likely to switch to EVs, bolstering residual values. However, if this 2035 deadline is pushed back once again, those currently planning to go electric might stick with their ICE vehicle, hampering the EV market once more.
Market volatility aside, there’s no indication that EVs should lose any more value than their petrol or diesel counterparts in the long run. According to the AA, the average new car loses approximately 60% of its value in the first three years (assuming it covers 10,000 miles each year). Before the used EV market started to struggle earlier this year, electric models generally adhered to this 60% figure – they didn’t lose any more value than their ICE counterparts.
Before EV sales took off, there were fears over batteries degrading after 5-10 years of use, hampering the car’s range and dramatically affecting its second-hand value. But now EVs aren’t the unknown entity they once were, these fears have begun to fade away. The oldest examples of Tesla’s breakthrough Model S are now 12 years old, and many of them are still driving around fault-free on their original motor and battery. And with tech improving year by year, the lifespan and capacity of EV batteries is only set to increase.
So, in summary, EVs should have comparable residual values to petrol and diesel cars in the long run – but it might take a few years for the market to stabilise.
Should I lease or buy an electric car?
This leads us nicely onto the topic of buying versus leasing. If you’re worried about depreciation and don’t want to risk your hard-earned cash on an EV that might lose a significant chunk of its value in just three years, you might want to consider leasing one instead.
Personal contract hire (PCH) deals are a great way to avoid depreciation entirely. Instead of paying monthly to own the car (as you would with a PCP contract), PCH allows you to enjoy the car for a predetermined period of time (usually between two and five years) for a fixed monthly fee. When your contract ends, simply return your car and get yourself a new one!
If you’re interested in finding out more about the benefits and pitfalls of leasing an EV, check out our dedicated guide.
Is it worth buying new instead of used?
That depends on your budget and what you’re looking for. At the moment, used EVs are more attainable than they’ve ever been – so if you’re simply looking for the cheapest way into a zero-emission car and want to buy it outright or trade in your current vehicle, the second-hand market should be your first port of call.
A number of manufacturers are still offering extremely attractive deals on brand-new EVs, though – they’re more affordable nowadays than you might expect. The best way to work out what you can afford is to shop around; if you’re planning on leasing your next car, head over to our electric car leasing page to compare deals from manufacturers and dealerships across the UK.
There are other benefits to buying a brand-new EV, too. Not only will you be the first owner and have the opportunity to customise the car to your liking, you’ll get to enjoy the very latest model with the best possible performance and the most advanced tech available.
Affordable models to look out for
We’ve already written a dedicated guide to the most affordable electric cars in the UK, but the market is constantly shifting. As of summer 2024, here are some of the best affordable EVs out there.
MG5
If you’re searching for a practical, no-nonsense family car, the MG5 is a worthy choice. Boasting a 250-mile range, a spacious boot and a feature-packed infotainment system, this five-seater estate car can handle everything from the commute to family holidays.
Nissan Leaf
It might be a little dated now, but the Nissan Leaf was a pioneer – and remains one of the best-selling EVs out there. The second-generation version was much improved over the first, offering a longer range, a more accommodating interior and improved performance.
Peugeot e-208
Although it shares the same platform as the Vauxhall Corsa-e, the Peugeot e-208 is a more composed, more refined and more upmarket-feeling choice. With a claimed 217-mile range and a cosseting ride, this supermini feels much more expensive than it actually is.
Volkswagen ID 3
Don’t let the unconventional styling of the ID 3 fool you: this is a practical family hatch that’s every bit as easy to live with as a Golf. With a similarly-sized boot and plenty of leg and headroom, the ID 3 is strong across the board – and the cachet of the VW badge certainly helps.
Renault Zoe
Having won over the motoring press from the get-go, the Renault Zoe will go down in history as one of the first EVs to genuinely take the fight to petrol and diesel power. Although it’s a little outdated (and outpaced) by some rivals in 2024, it still represents exceptional value on both the new and used market.
Kia e-Niro
With an impressive 289-mile range, a class-leading seven-year unlimited mileage warranty and a spacious, generously-equipped interior, the Kia e-Niro is the latest in a long line of success stories for the South Korean brand. Although it’s not the cheapest option, the e-Niro delivers where it matters most.
Fiat 500 Electric
In terms of style and character, the ever–adorable Fiat 500 Electric beats its rivals fair and square. It’s more than just a pretty face though, with plenty of useful tech (like auto wipers and keyless entry) and a 199-mile range. Not bad for a compact city car.
Check out our car leasing deals today
There you have it, our round-up of the used electric vehicle market in 2024. If you’re currently in the market for your next car and aren’t sure where to start, Cars2Buy is the place to be.
Our site allows you to compare thousands of new car leasing deals from the nation’s leading manufacturers and dealers, all in one place. Simply input a make and model to get started.