Used EVs are the only fuel type going up in price

September was the month the used car market stopped moving as one. The average asking price of a used car fell to £17,299, down 1.0% year on year and 0.8% on the month, according to Autotrader's Retail Price Index. Underneath that average, electric cars rose 2.8% to £25,091 and were the only fuel type to record annual growth, while diesel demand fell 19.2% against a backdrop of record diesel prices.

Two things need saying before any of this is useful. The figures are asking prices from listings, not sold prices, so they describe what sellers hope to get rather than what buyers paid. And demand here is a measure of activity on Autotrader's own marketplace, the searches and enquiries buyers make, not a count of completed sales. The index draws on hundreds of thousands of vehicles a day from across the retail market, and Autotrader says the Bank of England and the Office for National Statistics use it. That makes it a good guide to direction and a poor guide to what any individual car is worth.

The electric number

Used electric cars averaged £25,091, up 2.8% on a year earlier and the fifth consecutive month of positive like-for-like growth. Supply rose 26.0% over the same period, which on its own would push prices down, and demand rose 40%. That 14-point gap between demand and supply is why values held rather than fell.

Marc Palmer, Autotrader's head of strategy and insights, described a market splitting by fuel type. Demand for electric cars is "comfortably outpacing supply", supporting continued price growth, while record fuel costs are adding pressure to traditionally fuelled cars, particularly diesel. Electric cars also sold faster than the market as a whole, at 28 days against an average of 29.

Diesel's demand collapse

Diesel is the mirror image. Demand fell 19.2% year on year while supply fell 6.8%, and the average asking price slipped 0.8% to £13,924. When demand falls faster than supply, prices have only one direction to go, and the fuel price explains the mood. Diesel reached a record 200.01p a litre on 2 October, with petrol at 174.71p. The RAC calculated that a 45mpg diesel then cost about 20p a mile in fuel, or £2,020 over 10,000 miles.

The pump side of that story is covered in our piece on diesel crossing £2. The used market is where the price becomes a valuation. A buyer looking at a three-year-old diesel can see the weekly cost before they see the car, and dealers know it when they bid.

Petrol's long run ends

Petrol asking prices fell 1.0% to £14,625, ending 17 consecutive months of annual growth. Demand fell 5.8% and supply 5.7%, which is close enough to balanced to explain a gentle decline rather than a rout. The average used petrol car now sits £701 above the average diesel, which is a thinner gap than most buyers would guess.

The £11,167 gap is not what it looks like

The average used electric car at £25,091 is 80% dearer than the average used diesel at £13,924. That number gets quoted as proof that electric cars remain expensive, and it misleads. The electric parc is much younger than the diesel parc, so the two averages describe different cars with different mileages and different owners.

The like-for-like measure in the same index compares the same models at the same age, and by that measure electric is the only category going up. The age bands make the same point from the other direction. Cars under a year old fell 2.7% year on year, one to three-year-olds fell 2.4% and three to five-year-olds fell 1.0%, while cars aged 10 to 15 rose 5.6% to an average of £7,144. Nearly new cars are where the competitive new car market lands, with Autotrader pointing to growing overlap between new and nearly new stock.

What a three-year-old EV is worth against a diesel

For a buyer choosing between a three-year-old electric car and a three-year-old diesel, running cost is the part that can be calculated from published figures. A 45mpg diesel at 200p a litre costs about 20p a mile in fuel. A home-charged electric car costs a fraction of that, and public rapid charging narrows the advantage without erasing it. Add diesel's weaker demand and the resale risk now sits with the diesel rather than the electric car.

That is a change in the shape of the decision. For three years or so the used EV carried the risk, because values were falling and nobody knew where the floor was. The floor has been found, or at least it has held for five months, and the fuel that looked safest on the forecourt is now the one with the demand problem.

If you are selling

A diesel is not unsellable, and cars averaged 29 days to sell in September, one day faster than in August. But a seller should expect the buyer to price in the fuel bill. A dealer will be more selective about diesel stock, so service history, MOT record and a realistic asking price do more of the work than they used to. If you have a diesel to move and you do not need to keep it, the argument for selling sooner rather than later is stronger than the argument for holding out.

If you are buying

The electric side of the market is where haggling room is thinner, because demand is outrunning supply. That does not mean paying the asking price. It means the discount available on a three-year-old EV is likely smaller than on an equivalent diesel, and the car is likely to hold value better over the next two years on current evidence.

Three practical checks. Ask for a battery health report rather than a range estimate, since the estimate is a guess based on the last few trips. Confirm the car has the charging equipment you need, including a heat pump if winter efficiency matters to you. And look closely at the three to five-year-old band, where prices fell 1.0% against 2.4% for one to three-year-olds, because that is where the depreciation has already been paid by someone else.

Why supply will keep rising

One caveat sits over the whole picture. September's new car market registered 99,201 battery electric cars, a 28.3% share, which is the pipeline for used stock in three or four years. Supply of used electric cars already rose 26% in September and will keep rising as fleet returns arrive.

Demand rising 40% against supply rising 26% is a healthy market. Demand rising 10% against supply rising 26% would not be, and nothing in a listings index guarantees which happens next. The reason electric values have held is that buyers have absorbed the extra stock, which is exactly what the September trade valuations suggested was happening at three years old. Whether that continues depends on fuel prices staying high and on used EV prices staying close to petrol equivalents, a trend we have followed through the monthly price data.

The read

The used market is repricing fuel types in public. Electric is the only category with annual price growth, diesel is the only one with a demand collapse, and petrol has stopped rising after 17 months. The average used car at £17,299 is cheaper than a year ago, which is the headline most buyers will see. The more useful headline is underneath it: the gap between what a used electric car and a used diesel are worth is narrowing on a like-for-like basis, and the pump is doing most of the work.