New research from Cox Automotive reveals that hybrid vehicles are retaining their value in the used car market, while battery electric vehicles (BEVs) are experiencing a sharper decline in resale prices.
Residual values for hybrids and BEVs were nearly identical in November 2022, differing by just two percentage points (90% versus 88%). Since then, both have fallen significantly, with hybrids under 24 months retaining 68% of their original cost new (OCN), while BEVs of the same age now hold only 49%.
Insight director at Cox Automotive Europe, Philip Nothard, explained: “Hybrid vehicles offer drivers an alternative, cost-effective solution for buyers who want to transition to a more sustainable form of transport but have concerns around range or infrastructure. This is driving demand for them in the used car market, which helps support stronger residuals. Additionally, these vehicles have a lower cost of entry than their electric equivalents, which means they hold their value better when entering the used market.”
Recent policy changes could put hybrid residual values under pressure. From April, hybrids registered after 2017 face the same vehicle tax as petrol and diesel cars. In addition, the Government’s zero-emission vehicle mandate will phase out these cars by 2035.
Even so, 29% of drivers say they are considering a hybrid for their next vehicle, and plug-in hybrid registrations have risen 33% year-to-date, according to data from Regit, Cox Automotive, and the SMMT.
Nothard added: “Hybrid vehicles are a lucrative opportunity for UK drivers and the automotive market today, which is evident in the success of many new market entrants coming to the UK with hybrid offerings. […] Yet, evolving Government policy could undermine this potential if hybrid ownership becomes less financially viable.”
