Alternative fuel vehicles’ average used car values continue to gain in the first quarter of 2016. Alternative fuel vehicles (AFVs), which includes hybrid and pure electric cars, have increased in value by an average of £1,502 year-on-year, a seven percent increase over the same quarter in 2015.
What’s more, the gap over conventionally powered wheels continues to grow, especially over diesel, where values for average used cars continue to decline year-on-year. There are differences, however, in the types of alternative fuel vehicles. Pure electric vehicles increased by £750 year-on-year, while average hybrid values went up by £1,683.
Alternative fuel vehicles continue to find favour with consumers. In 2015 new AFV registrations continued remarkable growth of over 40% year-on-year to secure a new car market share of nearly three percent. Plug-in hybrids and electric cars seem to be the big drivers of this growth with plug-ins doubling in volume, and pure electric new car registrations growing by 50%.
With such strong growth in the new car market, it could indicate a knock-on effect on the used market with more consumers seeking out used AFVs. Certainly in March 2016 Auto Trader recorded a very significant 27% jump in the number of online advert views for AFVs compared to March 2015, and while there is a growing number of them entering the second-hand market (market share for used AFVs has increased from 0.92% to 1.18% year-on-year) it could be that supply is simply not keeping up with demand. Karolina Edwards-Smajda, Auto Trader Retailer & Consumer Products Director said:
“While we are seeing more used alternative fueled vehicles turning up on dealers’ forecourts, the increase in ad views points to more consumers than ever looking to buy. Used AFV values are rising significantly with a four-digit increase as buyers are drawn in by low fuel running costs, current road tax rates that mean AFVs are often free to tax and, for some, exemption from the London Congestion Charge. While both electric and hybrid are growing in value, it’s the hybrid of electric and conventional power that are proving particularly popular with used car buyers. This choice offers the greatest flexibility for a consumer unlike pure electric where the more limited range isn’t suitable for all car buyers.”
It isn’t just the likes of hybrid vehicles that have recorded an increase in values though, average values for used petrol cars have also risen year-on-year by £790 (8.3%). The loser in the second-hand market continues to be diesel, with these cars being worth less on average than a comparable petrol car. It’s a decline that began eight months ago and shows no signs of changing anytime soon.
The average value of a diesel car dropped by £138 (-1.3%) and represents the eighth month diesel’s average used car values are less than a petrol’s. Diesel’s used car market share increased to 47.91% from 46.94%, while petrol’s market share dropped from 52.13 to 50.91%.
The volume of diesel cars in the used market place continues to grows as ex-fleet stock enters the marketplace. There are currently over 361,000 used models advertised on Auto Trader at any time compared to nearly 337,000 in the same quarter 2015. Karolina Edwards-Smajda, said:
“Diesel vehicle used values continue to decline as supply increases and we are expecting to see equal market share between petrol and diesel come August 2016. With the number of used petrol vehicles on the UK’s forecourts declining, average used values are increasing albeit by a small margin. The drop in fuel costs may be exacerbating the trends in both petrol and diesel average used values, as consumers are less concerned about reducing costs at the fuel pump as well as petrol engines in newer cars proving they can compete with diesel for fuel efficiency.”