USED car dealers view electric vehicles as the biggest challenge facing them in the future, according to new research by Startline Motor Finance.
EVs were named as a concern by 37.7% of dealers, compared to compliance (18.9%), negative equity in diesel cars (13.2%), consumer expectations (11.3%) and the impact of revised commission structures (7.5%).
When asked for more details about retailing used EVs, 35.7% of dealers said they believed financing would be difficult, that finance provision needs revising through changes such as including batteries (17.9%) and that forecasting residual values will be difficult (14.3%).
Perhaps tellingly, 13.2% of dealers said they simply would not be retailing EVs at all.
Paul Burgess, CEO at Startline, said: “A large proportion of dealers clearly see EVs as a potentially significant disruptor for the future as they start to appear in volume on the used market over the next few years.
“Their concerns probably fall into several areas – finding the right finance provider is tricky and there is no long-term track record on which to base residual values for EVs, so the fundamentals of finance are difficult to resolve.
“There are also questions to answer around the structure of the finance product. Will the batteries and the car be part of the same agreement? This is a subject that has yet to be completely resolved.
“The other major areas is potential loss of workshop revenue. EVs simply have fewer moving and wear parts than established petrol and diesel cars and need to spend fewer hours being maintained. Dealers are probably concerned about this.
“Really, there are no simple answers to the EV issues about which dealers are worried and much depends on how manufacturers support these vehicles in the used sector – for example, by potentially guaranteeing RVs.”
The research was carried out by APD Global for Startline’s “The Future of Used Car Finance” report and surveyed 57 dealer businesses including franchise groups, independents, car supermarkets and online specialist brokers.
The sample chosen was designed to be representative of the dealer sector as a whole. All the respondents were senior managers who had responsibility for used car retailing and finance propositions. The consumer research covered 300 people who were planning to buy a used car.