Used buyers shy away from hybrids
The new range of plug-in petrol hybrids are going to take some time – if ever – to establish themselves as the ‘third fuel choice’ in the used sector, according to Glass’s.
Glass’s suggests that the popularity of petrol hybrid electric vehicles (PHEVs) while new is being driven almost entirely by company car taxation – and is unlikely to be matched by used car buyers.
Rupert Pontin, head of valuations, said, ‘Plug-in hybrids are doing quite well in the new sector as they are not in any way range-restricted like pure electric vehicles and can save the driver thousands of pounds in benefit in kind taxation.
‘Generally, a PHEV is congestion charge and VED exempt, and offers a better Enhanced Capital Allowance, which would allow a company to offset 100% of its value against income for the first year, as opposed to eight per cent for the equivalent diesel.’
However, Rupert said these vehicles usually do not make a compelling choice for used car buyers unless they are very keen to avoid the congestion charge and to enjoy vehicle excise duty exemption.
He said: “For used buyers, the question will be whether to go for a PHEV or the diesel equivalent. A big issue, we believe, will be real world fuel economy. The pure electric range of the PHEV is probably 20-30 miles and then the vehicle is driven by a petrol engine when MPG drops massively. These are quite big, heavy cars.’
Rupert said that there was also an underlying issue that the majority of used retailers and car buyers did not have much awareness of plug-in hybrids or how they might benefit certain kinds of motorists.
Rupert added that at a point in time when diesel and petrol prices were falling quite quickly and quite substantially, it becomes even more difficult to make a case for plug-ins. He said, ‘We are already seeing some evidence that low fuel prices are slightly affecting sales of alternative fuel vehicles at both new and used level. While oil is cheap, it does undeniably dent the appeal of hybrids.’