Used electric vehicles plummet in value

BMW i | July 23rd, 2015 by 3
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The electric car race seems to be the new horsepower race, with seemingly every automaker trying to pump out a new electric or plug-in hybrid …

The electric car race seems to be the new horsepower race, with seemingly every automaker trying to pump out a new electric or plug-in hybrid car. The battle is between all kinds of brands, both luxury and entry level. Chevy and Nissan battle it out with the Volt and Leaf, respectively, while Tesla and BMW have been at each other’s throats for the past year or so. The electric car wars are getting red hot. There’s a problem, however, and that is the fact that EVs are depreciating in value at an extraordinary rate.

Most people who drive EVs have leased theirs, which means that they were able to take advantage of some pretty great government incentives. The problem is that when those leases are up, the electric cars are worth next to nothing afterwards. Nissan has just sent over 500 off-lease Leafs to auction and got rid of them for what seems like pennies. Much of the reason for this is that there are only incentives for buying new EVs, not used ones. So once the car has been leased, driven and given back to the dealer, no one wants to buy them anymore.

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One of the Country’s largest liquidator of wholesale cars, Manheim Auctions, claims that used 2013 Nissan Leafs, by 2016, will only be worth $7,650, compared to today’s value of $14,900. That’s nearly cut in half in only one year. But it isn’t just the Leaf that suffers ridiculous annual depreciation. While the Leaf is expected to lose 48.70% in annual depreciation, the Mitsubishi i-MiEV is expected to lose 44.70% and even the Tesla Model S is expected to drop 28.90%. Those are massive annual depreciation numbers. Even the BMW i3 has been having lease takeovers, from people who put significant down payments on their initial lease, for incredibly low monthly payments. We’ve seen payments ranging from $250 to $400/month on well equipped i3s with the Range Extender function.

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The EV is one of the most important vehicles for the automotive landscape at the moment, but the current value of them is already low and is continuing to plummet. Decently low oil costs and lack of incentives on used EVs is causing people to buy low-cost gasoline alternatives for commuting, rather than a low-cost EV, like the Leaf or Volt. Only if oil prices start to rise again, or some kind of government incentives are put on used EVs, will the second hand value of them go up. Until then, go out and buy used EVs, you’ll get one for pennies on the dollar. Hell, I don’t see a reason why people shouldn’t be flocking BMW lots for used i3s. Who cares if it doesn’t have more incentives, go buy a carbon fiber monocoque EV for the same price as a decently loaded Honda Accord while you still can.

3 responses to “Used electric vehicles plummet in value”

  1. steven75 says:

    This thinking is kind of circular: No one is buying used EVs because you can only get rebates on new EVs yet the used EVs have dropped in price which more than makes up that difference anyway.

    I agree that if your *primary goal* is to get the lowest overall cost, a used EV is hard to beat.

    So where’s the problem here? Basically either lease or buy used until the depreciation record is more established. Unless you plan to keep the car for 10 years or whatever in which case it doesn’t make much difference.

  2. rconaway says:

    The best deal would be to buy a 2013 Leaf, wait until the battery starts going, and replace it with the newer 30KW battery. $16K out the door for a $30K car with probably less than 20,000 miles.

  3. BrotherKWS says:

    Every new car plummets in value. Cars are not an investment but are rather a tool with a purpose. They all become worthless eventually (except for perhaps a tenth of one percent which are collectors items). The thing is that prices even for the new ones are dropping precipitously and as Steven mentions the tax rebates are the thing that make the new ones seem a better deal, It is likely this tax rebate situation that has them appearing to be much higher in depreciation but, no one will pay more for used than they can pay for new, so the price for used has to be lower than what a new one with rebate costs. On another note, low priced EVs are a good thing, not bad, and I am certain that the majority of people who bought a new EV are perfectly aware that they are early on the adoption curve and will see future vehicles become cheaper and better performing. They are largely advocates and early adopters because they believe we should be both greener and reduce our dependence on finite resources (freeing us from the foreign difficulties we seem incapable of extracting ourselves from). In my opinion, they are patriots.

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