Two new pieces of research detail some trends emerging in the U.K. that will affect online auto marketplaces.
A study from EBay Motors Group suggests car buyers are spending more time searching for their new vehicle to try and find a bargain due to concerns over affordability amid persistent double-digit inflation and rising interest rates in the U.K.
A separate report from Auto Trader highlights that the U.K. is likely to struggle to meet its 2030 target to halt sales of new petrol and diesel vehicles because of a 65% drop in buyer interest in new EVs since the start of 2022.
EBay Motors Group’s survey of 2,000 motorists found that 27% of in-market buyers expect that buying their next car will be a more time-consuming process, partly due to affordability concerns. Its latest Consumer Insight Panel research discovered that 44% of respondents said this was due to rising car prices. Just over a third (34%) said the need to assess running costs and a desire to search online for the best deal were reasons the process would take longer.
A further issue cited by 28% of those surveyed was that they wanted to take more time to consider whether to switch from a petrol or diesel vehicle to an EV. Overall, buyers expect to spend an average of 42 days looking for their next car — 46 days for men and 38 days for women. Buyers for new cars took an average of 45 days, compared to 40 days for buyers of used cars, according to the research.
“Our research reveals how pressure on consumer spending means a significant number of buyers will spend longer in the market searching for their next car as they carefully consider their options,” said Lucy Tugby, marketing director of eBay Motors Group.
“With buyers still spending an average of six weeks searching for their next car, it’s important that sales staff appreciate how hard they have already worked and support them in the later stages when leads turn into showroom visits.
“Furthermore, with some makes and models still facing long delays and nearly new alternatives in short supply, dealers have an opportunity of opening up conversations with some new car buyers about suitable alternatives from their used car inventories.”
U.K. lagging on 2030 target
Meanwhile, the study conducted by Auto Trader suggests the U.K. government is not on target to meet its target of banning the sale of new petrol and diesel vehicles from 2030.
As part of Auto Trader’s Road to 2030 report, data shows that EVs share of the market is falling behind where it needs to be if this target is to be met. It found a 65% decline in buyer interest in new EVs since the beginning of 2022. This is due to a variety of reasons, including the cost-of-living crisis (particularly high energy prices) and the rising cost of borrowing.
Auto Trader says there is a lack of affordable choice for new EVs and has called on the U.K. government to provide more support for the initiative by producing a “detailed programme of tax incentives to improve the affordability of EVs.”
The study found that in the most popular price bracket for vehicles on Auto Trader’s site (between £20,000 and £30,000 — $24,868 and $37,301 U.S.), there is a lack of EVs for sale. Currently, a new EV costs around 37% more on average than its petrol or diesel equivalent. This figure has remained at the same level since June 2022. Below the £30,000 mark, there are nine-times-fewer EV options available to buy than diesel or petrol vehicles, it noted.
However, Auto Trader’s report points to a growing market for used EVs, with demand up 30% year on year (y-o-y), facilitated by rising supply. On its own site, the number of second-hand EVs is 258% higher y-o-y. It expects this trend to continue but models are undergoing large price drops due to supply growing at a faster rate than demand.
Auto Trader found that from a peak of £40,728 in July 2022, the average price of a second-hand EV is now £31,767. This contrasts with second-hand petrol and diesel cars where prices went up by 5.4%, to £16,312 and £16,518, respectively.
“We have the broadest single view of EVs, and as our data highlights, the market is incredibly nuanced, and so a broad-brush rarely reflects the true picture,” said Ian Plummer, Auto Trader’s commercial director.
“These are difficult times for the UK’s electric ambitions, however, and we’re in danger of veering off-track. To avoid more than just a small pothole on the road to 2030, more information, more incentives and more equality is urgently required.”
Auto Trader has urged the government to introduce tax breaks to encourage EV sales. It also wants fairer charging costs, by equalizing the VAT rate on public and private charging; additional incentives to make EVs affordable for more people, for instance reducing VAT on used EVs and lower or even interest-free rates for loans to buy EVs; and more initiatives to build both buyer and seller confidence in used EVs, particularly concerning battery health.
