EV leasing market facing significant losses due to plummeting used EV values in the UK

From Yahoo Finance: 2025-06-23 09:51:00

Car finance firms are facing significant losses as used electric vehicle values plummet in the UK. The British Vehicle Rental and Leasing Association reports that firms are losing hundreds of millions due to unanticipated EV depreciation, leading to extreme financial challenges for lenders. Used EV values have failed to meet forecasted levels, contributing to substantial financial hits for the industry.

The current state of the market has left many car finance firms struggling, with vehicles returning at values well below initial forecasts. The situation has led to significant financial losses per car, impacting the industry’s profitability. Many vehicles were financed based on outdated assumptions, exacerbating the financial challenges faced by lenders in the current market.

The used car market is experiencing a significant imbalance, with electric vehicles losing value rapidly compared to diesel vehicles. The aggressive discounting of new EVs has affected the used market, with EVs retaining only 47% of their original value compared to diesel vehicles holding up better at around 70%. This imbalance has raised concerns about the future of the industry and the transition to net zero.

The rise in consumer demand for battery electric vehicles (BEVs) has been significant, with a 58.5% increase in BEV transactions in Q1. The affordability and increasing supply of BEVs have made them an attractive option for buyers, driving growth in the market. Despite the challenges faced by car finance firms, there are opportunities to manage future values and mitigate losses through tailored solutions and interventions.

Bluestone Credit Management offers automotive collections expertise to help lenders navigate the challenges in the EV leasing market. With outbound customer contact capabilities, Bluestone can assist lenders in proactively contacting customers and tailoring new financing solutions. By pivoting their model to address the current market dynamics, Bluestone aims to support lenders in mitigating losses and retaining customers in the evolving automotive landscape.



Read more at Yahoo Finance: From overheating to undervalued, what’s next for the EV leasing market?