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- Should You Buy a Used Electric Car as a Car Trader? All You Need to Know
Should You Buy a Used Electric Car as a Car Trader? All You Need to Know
Dive with us into the pros and cons of buying a used electric vehicle and answering a burning question - are second-hand electric cars a good buy for car traders?
Ever wondered if you should buy used electric cars for your car trading business? With the price of fuel rising, the semiconductor shortage impacting the production of new vehicles, and the ever-closer doom of the climate crisis, many people are switching to electric cars. Or at least considering.
Local European governments are creating low-emission zones and heavily subsidizing the purchase of electric vehicles (EVs). Even car manufacturers are announcing their complete break-up with internal combustion engines in the foreseeable future. It seems that the future really is electric.
What does this mean for us, car dealers and traders? This growing popularity of EVs, substantial tax benefits (especially for companies), and the rising cost of diesel and petrol car ownership means more used electric cars are now available on the second-hand market than ever before.
In this article we’ll dive into the state of the used electric car market and analyse the pros and cons of buying an electric car.
How the electric car market evolved in 2022
At the moment, the demand on the new EV market outshines the supply. There is now an unprecedented demand for new electric cars, leading to long waiting times to fulfill new orders.
If we add the still-ongoing shortage of semi-conductor components into the equation, we have quite a situation.
Volkswagen recently revealed that it sold out their battery-powered vehicles in the US and Europe for 2022 as “persistent supply chain bottlenecks hit global production”. Other manufacturers, like Kia, BMW and Audi are reporting similar delays.
On the other hand, as more electric cars enter the new car market, so do they eventually find their way into the used car market - from leasing companies to eCarsTrade to your own trading business.
According to the European Automobile Manufacturers’ Association (ACEA), 18% of all new passenger cars registered in the EU in 2021 were electric vehicles. That’s a solid increase from 10,5% in 2020. Autovista24 predicts these numbers will only continue to rise and that “EVs will account for one in four new-car registrations in Europe by 2023, one in three by 2026, and one in two by 2030”.
As far as internal combustion engine cars go, petrol and diesel car registrations are steadily declining. “2021 marks a historic landmark for HEVs becoming the second-most popular fuel type in the EU”, Autovista reports. Looks like a bright future for electric cars from where we’re standing.
ACEA tracks the share of electric vehicles in various countries and reports growth in 30 different European markets. Germany leads this list, where more than one in four new registered cars was an electric vehicle. Traders, heads up, it seems like Germany is the market to focus on.
Italy and Spain are also experiencing an upward trend in the share of electric cars. Currently, hybrid electric vehicles are getting more and more interesting in Italy - mostly in the north - as you don’t have to pay the Italian tax on vehicle ownership for the first five years, which is quite a huge financial benefit (see an overview of benefits per region in Italy).
It is clear by now that electric cars are here to stay and grow in popularity, with various manufacturers coming out with new, improved, and innovative EVs.
The current oil situation, rising consumer concerns about the climate crisis, and Co2 emission targets are all piling up to create an opportunity for the electric vehicle industry to expand. By 2035, as far as the European Parliament is concerned, we could all be driving electric.
Is it worth buying a second-hand electric car?
We've compiled a list of some of the advantages of an electric car for your car trading business as well as why they would be attractive to your end clients. Here’s what you can tell your clients next time they ask you why they should buy a used electric vehicle:
- Environmental friendliness - One of the biggest advantages of buying a used EV goes without saying - it’s just good for the planet. This is a great conversation starter when explaining to your clients why they should consider going for an electric vehicle.
- Low running costs & low deprecation rate - This might be our favorite advantage on this list, especially for traders. There is no need for fuel, and electricity comes at a much more affordable price point than petrol or diesel. Traders can sell the fact that the higher price point of EVs eventually balances out by what they save up in fuel costs. Another great selling point for traders is that electric cars are also just simpler in mechanical terms. They have fewer movable parts, which means that fewer things can fail or wear out, aka less chance of mechanical failure and less need for maintenance. In conclusion, electric vehicles tend to have a lower depreciation rate than regular cars.
- Benefits - Governments and authorities are very generous with various incentives, grants, tax benefits, and exemptions. As electric vehicles are still not the majority of vehicles on the road, many incentives are currently in place to make them more attractive to companies and private consumers.
- Performance - Even though electric cars fall behind standard petrol and diesel cars when it comes to top speed, they are slightly quicker than internal combustion cars thanks to the electric motor's instant power and torque. EVs also feel smooth to drive, and they are super quiet.
Electric car battery degradation and other challenges of electric vehicles
In our opinion, the advantages of electric vehicles far outnumber the possible challenges, but for the sake of argument, let's dive into some of the disadvantages:
- Battery degradation - You can think of the battery in an electric vehicle as any other battery anywhere else, in your smartphone or laptop, for example. The more time passes, the less efficiently the battery will charge. This also means the vehicle's potential range will inevitably reduce. However, current electric car batteries last anywhere from 10 to 20 years before they need to be replaced. So if you're buying a used electric vehicle, the battery should still be relatively healthy and have a lot of life left in it. Some of the oldest EVs on the market, like the BMW i3, are less than 10 years old. Also, battery degradation happens slower than you might fear. On average, battery health is still well above 80%, even after six years.
Pro-tip for our car trading customers! - your purchased electric vehicles will (but hopefully not) sit on your parking lot for an extended period. Check the manufacturer's recommendations on how much you should charge the battery before you store your car. "The best option is to charge your battery to no more than 50% before leaving your car parked for an extended period of time", Renault advises for their electric cars.
- Driving range - This will vary depending on how old the vehicle is. Due to older technology, older used electric cars can only do shorter distances before needing to be charged again. A Renault Zoe from 2013 has a modest range of 100 - 150km, while the Zoe from 2021 goes up to a whopping 390km. Remember, older used electric cars will need to be charged more often than newer model.
- Battery lease - Probably a minor point to consider since chances are high you're eyeing a newer model, but we're putting it out there just in case. Some older EVs, like the Renault Zoe or Nissan Leaf, were sold without a battery, which you would need to lease separately. Make sure to check whether the battery is included!
- Charging points – if you acquire an electric vehicle for your car trading business, keep in mind you will need to have charging points installed at your premises or at least have them somewhere close by. Thankfully, there's no shortage of EV charging infrastructure incentives that you can benefit from.
Are used electric cars tax deductible?
There are currently many financial benefits, purchase incentives, and tax exemptions associated with electric vehicles.
In September 2022, ACEA, The European Automobile Manufacturers’ Association, came out with a comprehensive overview of various incentives in all European Union member states.
Here is a quick overview before we jump into a more detailed look:
For a super detailed overview of benefits in each EU country, check out ACEA's extensive 2022 list of electric vehicle tax benefits.
Apart from these, there are also incentives for EV charging infrastructure for European Union member states. We recommend checking out this article for an overview of EV charging infrastructure incentives, which could benefit car traders who plan on investing in electric vehicles. For you, having a charging infrastructure in place will be essential to keep your EVs in perfect state until they’re sold.
Are used electric cars a good buy?
There’s no doubt about it - electric vehicles are here to stay. And they will only get better with time as technology inevitably evolves.
New EV legislation is coming into place as well. For example, in Belgium, all ICE (internal combustion engine) company cars will stop being tax deductible by 2028. If employers want to keep their tax benefits, they will only be able to offer electric cars as company cars from 2026 onwards.
With electric cars entering the fleets in this manner (and quite soon), we’ll inevitably start seeing them more on the used car market. Electric vehicles are also easier to maintain and have less chance of mechanical failure. Their environmental friendliness is becoming a necessary future rather than just a buzzword.
We have yet to see how the used car market will absorb EVs, but one thing is for sure - the future is electric.
And what’s a better place to shop for electric cars than eCarsTrade? Check out our selection of electric and hybrid vehicles on our platform, and feel free to get in touch with us if you have any questions about going electric!
