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How Electric Car Grants Are Shifting Demand, Pricing, and Part-Ex Values

Written by Amy Roberts | Oct 9, 2025 2:28:25 PM

What The Grant Actually Is (No Fluff)

  • Two grant levels: £3,750 (Band 1) and £1,500 (Band 2) on approved new EVs that meet technical and sustainability criteria. The official eligibility list is updated by the government.
  • The government confirmed more models were added in late August (including Ford Puma Gen-E and E-Tourneo Courier), bringing the eligible pool to 28 models at that point and explicitly noting that the full £3,750 now applies to certain cars.
  • Price caps are part of the design. Current trade coverage cites a cap in the high-£30ks for many entries (Auto Trader references £37,000), while other outlets note variant rules that effectively cap up to £42,000; in practice, entry trims tend to qualify. Always check the live list.

What Changed In September—And Why Dealers Noticed

  • Best September for EV volumes on record: 72,7xx BEVs; EV market share 23% in a month where total registrations rose 14% to 312,9xx. SMMT and multiple outlets attribute the surge to manufacturer discounting + ECG.

  • Enquiries jumped: Since July’s announcement, new-EV enquiries on Auto Trader are up 44–50%, with grant-eligible models more than doubling versus pre-grant weeks.

  • The price gap narrowed: the EV premium vs petrol fell to 19% (down from 33% a year ago) as brands repriced and the ECG landed, meaning more shoppers now cross-shop ICE and EV rather than defaulting to petrol.

Inside the September Auto Trader data: EVs were also the fastest-selling fuel type in used (27 days); overall, used stock averaged 28 days. That’s your clue, this isn’t just a new-car story.

“But Marsh Doesn’t Fund EVs Right Now.” True, But This Still Hits Your P&L

We don’t currently fund EVs. Here’s why the ECG still matters to every dealer and broker:

  1. Part-ex maths changes

    More new-EV deals = more ICE part-exes coming back, often at family-SUV and hatch price points. Expect extra ICE supply and sharper pricing in certain age/mileage bands.

  2. Used-car pricing stays firm

    September’s used prices rose +0.6% YoY, the second straight monthly gain; older cohorts (3yrs+) showed MoM resilience and YoY strength, while used EV prices were stable with stock turning quickly (27 days). Translation: you can hold the price if the retail story is clear.

  3. New-car discounting bleeds into used

    OEMs leaned into discounting (avg 10.1% of list; EV incentives 11.8%), which reshapes buyer anchors and pushes shoppers to compare used versus discounted new. Make your used-car value obvious on the VDP.

What The Next Two Quarters Probably Look Like (Directionally, Not Dogma)

  • Grant momentum carries into Q4: EV share lifted to 23% in September; enquiries still running hot after model list clarifications. Expect ongoing churn in grant-eligible models and short-term EV order uplift.

  • Used market stays stable: September marked eight straight months of YoY used growth, with independents benefiting from older-stock demand. Expect healthy ICE turnover as EV-driven part-ex flows arrive.

  • Residuals: watch the edges: Mainstream, family-friendly EVs likely hold best; niche or high-MSRP trims could be more volatile. SMMT and press note we’re still below 2019 volumes overall, so pacing matters.

Practical Moves For Retailers (Even If You’re ICE-Only On Finance)

1) Price and stock by job-to-be-done, not fuel type

Create three buyer funnels on site and in-store: Value commuting, Family space, Comfort & tech. Surface 4–6 best-fit ICE/hybrid picks in each funnel so you’re competing with “new EV + grant” on use case, not headline fuel.

2) Refresh part-ex valuations weekly

Grant-fuelled EV orders = more ICE trade-ins. Tighten your appraisal grid on C-/D-segment petrol & diesel (ages 3–7). The Auto Trader file shows 3–5-year stock selling at 27 days and older cohorts holding value—don’t sleep on that.

3) Control the used VDP story

Add a simple “Why this costs what it costs” panel:

  • recent maintenance (belts, brakes, tyres)
  • two keys / clean MOT trail
  • included pack (service + 12-month MOT + basic warranty)

This protects the price against discounted new.

4) Put monthly and TCO up-front (for ICE too)

New EV listings are suddenly heavy on monthly and running-cost comps. Mirror that on ICE/hybrid VDPs (fuel economy at real-world speeds, insurance band cues). If buyers are comparing, make the comparison easy.

Broker & Lender Lens

  • PCP/HP demand on ICE stays strong as monthly anchors for grant EVs firm up buyer expectations.
  • Approval mix may shift if more near-prime customers chase discounted EV PCPs with captives; that can raise ICE enquiry quality for independents.
  • Risk hygiene: keep an eye on ICE residuals in segments where grant-eligible EVs are direct substitutes. Adjust GFVs and terms accordingly.

What The Data Says (So You Can Brief Your Board)

  • EV sales record in September: BEV share 23%, total market +14% YoY.

  • Grant effect on demand: EV enquiries +44–50% since July; grant-eligible models up 2x.

  • Used resilience: prices +0.6% YoY; used EVs fastest to sell (27 days); overall used 28 days.

  • Discounting: avg 10.1% on new; EV incentives 11.8% concurrent with ECG rollout.

Where Marsh Finance Fits

We don’t currently fund EVs, but we do help partners monetise the ripple effects:

  • Soft-search on every ICE/hybrid VDP (eligibility without the credit-file fear)
  • Fast HP & PCP decisions for used ICE/hybrid, including near-prime

 

Sources

  • Auto Trader Monthly Market Intelligence — September 2025: EV enquiry uplift; used days-to-sell; used price stability; discounting context.
  • SMMT & press round-ups: record September EV volumes; total market up 14%. SMMT+2Reuters+2
  • Gov.uk: ECG tiers (£3,750 / £1,500), eligibility management, model additions. GOV.UK+2GOV.UK+2
  • Trade coverage on caps/eligibility (to sense-check price thresholds and ongoing updates). AutoTrader+1

The ECG Is A Rising Tide

Even if you’re ICE-heavy, you’ll feel the lift in enquiry quality, part-ex flow, and pricing power if you frame the value clearly and keep the finance journey effortless.