Startline flags tightening finance pipeline for EVs

Nearly all dealers (97%) feel they need better support from finance providers to fund the purchase of electric vehicles (EV), according to the Startline Used Car Tracker.

The survey revealed that 52% of dealers believe their lenders are less inclined to finance EVs, 45% reported higher finance rates, and 21% said lenders require higher deposits. Additionally, 14% indicated their lenders refuse to finance EVs altogether.

Comparing this to data from 12 months ago, the situation has worsened.

Last year, 58% of dealers called for more support, 41% noted reluctance from lenders to finance EVs, 10% required higher deposits, and 5% faced higher interest rates. At that time, only 5% reported a complete refusal from lenders to finance EVs.

Paul Burgess, CEO at Startline Motor Finance, said: "Over the past year, the continued decline in EV values has negatively impacted lenders' willingness to fund these vehicles. Initially, EVs were an unknown risk for lenders, but as more information became available, it was mostly unfavourable. Many lenders have had negative experiences with EVs."

Despite these challenges, Burgess called for resolution as increasing numbers of EVs enter the used market.

"The fact that nearly all dealers in our survey identify issues with EV funding suggests significant problems that require attention. While the EV market will likely stabilise over time, “

“Lenders have limited capacity to address this issue, but increased government support, such as interest-free loans for used EVs already available in Scotland, has been discussed."