New incentives could make used electric cars cheaper

The AA is urging the Chancellor to consider incentives for used EVs in the upcoming Budget on 27 November. Such measures could make second-hand electric cars more affordable and give drivers an extra reason to switch to electric.

In a new report, the AA argues that the UK’s used electric car market could use a boost. While charging prices remain frozen, the motoring group says more needs to be done to support buyers of second-hand EVs.

“While the grant on new electric cars is welcome, the majority of private car sales take place in the used market,” said Jack Cousens, head of roads policy at The AA. “Those looking to buy are wowed by the tech EVs offer and, with the right incentive, could make drivers think twice before choosing their new wheels.”

Cousens adds that using the Budget to announce a used car grant, or discounting VAT on used sales, “would help invigorate used EV sales.”

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But why does the used EV marker matter? New research shows that around 90% of private car sales in 2024 were used vehicles, meaning most buyers miss out on the official EV grant scheme. The AA is now calling for incentives, such as grants, interest-free loans, or VAT relief, to help make used electric cars more accessible to everyone.

When it comes to cost, buying a used EV is surprisingly close to the price of a petrol car. A new electric car is typically 27% more expensive than its petrol equivalent, whereas a used EV costs just 3% more than a used petrol model. While this is great news for private buyers, fleet and leasing companies are feeling the pinch from high depreciation. Without action, the AA warns, the used EV market could face serious challenges.

“Fleet and leasing companies are currently propping up the sector with a solid turnover of cars, but this can’t continue much longer,” said Cousens. “The depreciation levels on used EVs is reaching a tipping point where some form of used electric car incentive is needed to help shoulder some of the burden.”

Drivers already enjoy stable charging prices, with costs unchanged since August. Off-peak ultra-rapid charging can cost as little as 50p per kWh, allowing an 80% charge for around £20. That’s roughly half the price of filling a petrol tank.

There’s also home charging, which can cost electric car owners as little as 7p per kWh to charge up overnight. For drivers, this means smarter charging can save money without impacting daily routines.

But what could this mean for drivers? If the government introduces incentives for used electric cars, buying one could soon be more affordable. And with charging costs staying steady, drivers can plan their journeys without worrying about sudden price spikes.

In short, a little government support could make used EVs more accessible, save drivers money, and help the UK move closer to its net-zero goals, all at the same time.

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