Why funding is a vote of confidence in the electric car market

Main image credit: Paul Burgess, CEO, Startline Motor Finance

This month, we’ve started providing used used electric car funding for the first time, with exactly the same products and terms as for petrol and diesel models. 

It feels like something of a milestone and we view it very much as a vote of confidence in the growing stability of the electric car market. Like everyone else, we’ve been monitoring the sector closely over the last couple of years and, as everyone knows, it’s been something of a roller coaster ride with an emphasis on rapid downhills. 

Our view has been, like many others in the motor finance sector, that it was just too risky to get involved but lately, the data has begun to tell a different story and our conclusion is that the market is now sufficiently mature to get involved. Largely, we believe that the kind of dramatic shifts in values and prices that have plagued electric cars are probably over, and this is the right time to offer funding. Simply, we believe that the sector is now viable for us as a lender.

Today, only something like one in 40 used car sales are electric but with large scale defleeting from the company car sector beginning to get underway, penetration will no doubt increase rapidly, alongside consumer acceptance. There’s a media narrative that used buyers are resisting electric cars and to some extent, that is no doubt true, but it is also the case that used electric cars are now very keenly priced, represent excellent value, and are starting to look increasingly appealing to more buyers.

Motor finance plays a pivotal part in making these vehicles affordable. Because the electric car parc is relatively new and list prices tend to be higher than petrol or diesel equivalents, most models are more expensive than the average used car overall. The type of products we offer make them more viable to buy while potentially removing the residual value risk for consumers, and could prove essential to adoption.

Interestingly, our monthly Startline Used Car Tracker report for September shows that more than four out of five people expect to be driving an electric car by the end of this decade, a finding which paints a different picture to the much more negative one commonly seen. If this research is even partially accurate, there will be a massive swing towards electrification and motor finance is going to play a huge part in making it happen.

Founded in 2013, Startline is one of the UK’s leading motor finance companies, providing flexible solutions to around half of the top 50 franchise dealers and 70% of the top 50 independent car retailers measured by turnover, as well as accounting for more than 2% of the motor finance market by volume. It aims to deliver market-defining levels of customer service, compliance, innovation and insight. The company is headquartered in Glasgow where it employs more than 200 people and has a comprehensive sales presence throughout the whole of the UK.

​​​​​​​For further details visit startlinemotorfinance.com