Electric cars now on sale could plummet in value by two-thirds when they reach the second-hand market in a few years time, predicts a major used car retailer. At five years old, says ACF Car Finance Limited, such vehicles could fetch just ten percent of their new price.
The shock drop is due to the cost of replacing the electric batteries around the car’s eighth birthday – which could cost the owner up to £8000.
The company, which specialises in mid-range family cars, says that many customers are likely to steer clear of buying electric models more than a couple of years old.
Leyton Cooper, ACF’s Divisional Group Buying Manager, believes that the widespread usage of electric cars will depend on a flourishing second-hand market.
But this will only be seen, he says, when manufacturers solve the issue of battery costs and their lifespan, currently around eight years. The company’s depreciation estimates are based on its own study of pre-owned electric car prices and the findings of industry guides to used car trade values.
“We sell thousands of cars each year, and I’m sure that the percentage of electric models will start to rise dramatically as the second-hand market comes on-line,” said Leyton.
“But anyone trading in an electric car which is more than three years old will have to take a big hit on depreciation as things stand at present.
“This is potentially great news for the buyers of used electric cars, but we will be warning them of the useful life that is likely to be remaining for the battery,” he added.
ACF Car Finance’s national network of car showrooms specialises in supplying vehicles to the growing number of people with impaired credit records.
The used car market, says Leyton, is increasingly dependent on this sector as more drivers find that even minor blemishes on their credit records are affecting their ability to borrow.
“We estimate that by around 2013 there will be a major rise in the number of second-hand electric cars coming into our showrooms,” said Leyton.
“If the market isn’t going to stall at that point, manufacturers will have to start addressing the battery problem now,” he commented.
More information about the company can be found at www.ACFCarFinance.co.uk.