Why Used EVs and Hybrids Are Not Retaining Value
Let’s be honest for a moment. If you’re seeking a used car, there’s a good chance that you’re going this route based on your finances. Unless you’re a car enthusiast who is obsessed with owning the latest car, this actually isn’t a bad route to head down. If you’ve ever been worried by the future of the automobile industry and how electric cars will impact the used car market, there’s no reason to fret.
As Jim Gorzelany of Forbes.com writes, while used car prices are typically rising across the board, electric vehicles are going the opposite direction. So why are all the cars you see featured on the lots of Lexington used car dealerships retaining their value better than electric cars? Read on to find out…
As the writer explains, logic would suggest that only collectible, antique cars rise in value as they years go on. However, according to a report by Edmunds.com, used car prices jumped 7.6-percent in the second quarter of 2015, resulting in an all-time high average price of $18,800. You’d reasonably predict that all of the used cars on the market would see an uptick in value, right? Not so fast.
Electric vehicles have actually been trending the other way, as the NADA Used Car Guide’s Electric Vehicle Retention Report Card suggests that trade-in values for two-year-old hybrids and plug-ins have been dramatically dropping in price over the past couple of months. The cheapest of the analyzed electric cars only retained about 20-percent of their original price.
This isn’t excellent news for the car industry, but it’s a positive for the customers. Gorzelany looked at 2013, sub-22,000-mile electric vehicles (like the Nissan Leaf and Ford Focus Electric), finding that the cars sell for as little as $10,000. This is an absolute bargain, especially when you consider the amount of gas money an electric vehicle could save you. For example, the Leaf can expect to deliver an 84-mile range on a full charge, which should be more than enough to get you to and from work.
“Used EV demand continues to be hampered by range and technology concerns,” according to the NADA Used Car Guide’s report (via Gorzelany). “Many three-year-old EVs are now nearing or already to the point where they are no longer covered by their respective manufacturer’s basic warranty due to age or mileage accrual, [which is] a potential concern since an extra layer of risk is being added into the mix when used EV buyers are shopping for vehicles.”
Of course, the writer warns that this may just be a temporary trend. As gas prices continue to sit in the two dollar range, it reduces the need for electric vehicles. As gas prices rise (and electric vehicles become more prominent), we can expect to see the prices of these used electric vehicles increase.
Unfortunately, purchasing an electric car doesn’t make sense for everybody. There currently aren’t a variety of charging stations, and unless you live in California, it’s unlikely that you’ll get to drive your electric vehicle very often. Either way, it’s a positive for those that are in the market for a hybrid.
While you may not be able to find these cars at Dan Cummins dealership, you’ll still come across an assortment of suitable vehicles. Head down there today and see what they’ve got available!