There are currently many contributing factors to consider when looking at the used car market. Car ownership has risen for the first time since 2019, according to the Society of Motor Manufacturers and Traders (SMMT), and some manufacturers shifted towards higher specification models during the semi-conductor shortage in a bid to boost profits. Both factors could have knock-on implications for years to come.
However, the most prominent aspect of change for the used car market is the rise of Battery Electric Vehicles (BEVs). The amount of readily available used BEVs is increasing. The evolution of BEVs has happened quickly, which presents challenges around managing residual values, as well as navigating the supply and demand trends.
Is the UK doing enough to support the used BEV market?
While an additional £56 million of funding was allocated to increase the amount of Electric Vehicle (EV) chargepoints across the UK earlier this year, there is still caution around infrastructure and range anxiety. Elsewhere in Europe there are grant and funding initiatives to encourage sales of used BEVs, but currently there’s no equivalent in the UK.
The increasing volume of used electric vehicles entering the market is creating pricing uncertainty, and with competition from Chinese brands entering the market too, it essential to continuously monitor developments to plan for the future.
Internal combustion engine (ICE) vehicles are still favoured in the used car market, with SMMT reporting 3,903,587 petrol and 2,691,293 diesel vehicles were sold in 2022. If nothing changes, it’s unlikely there will be a shift from this preference, which could lead to an imbalance between BEVs and ICE vehicles.
With the number of used BEVs forecast to continually increase this year and beyond, education and support for electric technology is vital for the automotive industry.
Whatever you require from an employee car benefits package, we’re confident we can help. Our solutions are inclusive of all employees and offer flexibility to include, one, two or all three or a combination to suit your business needs.
Control your used car pipeline
To ensure you have varied used car stock and can manage profitability efficiently, why not choose employee car benefits as a used car strategy.
By providing an employee car benefit you choose which vehicles you want on your choice list, which will generate six, nine and 12-month old prime used car stock. All of which will can be generated off balance sheet and driven by your employees to deliver a margin.
You’ll have peace of mind knowing exactly which cars will be entering your pipeline and when you can start the remarketing process.