Used electric vehicles have the best used prices of anything automotive. Here’s why.
After a very careful analysis, the folks at Black Book have confirmed what NADA has been saying for a couple years. Used EVs like the Nissan Leaf and Chevy Volt sell for dramatically less than do gasoline-powered fuel-efficient cars. Interestingly, the reasons that electric vehicles have such great used car prices are exactly the same things that make them such a tempting new-car purchase.
The first and most obvious reason that EVs are inexpensive to buy used are federal and state incentives. On a new EV, the federal government dangles a $7,500 tax deduction. You don’t get anything if you buy a used one. That means that any EV which has been registered at any DMV devalues $7,500 as soon as the title is issued. If that car is registered in one of the many states that give rebates, like California’s $2,500 rebate, for example, the instant devaluation is as much as $10,000. Just to make the math easy, let’s say a buyer takes home a $30,000 electric vehicle. That very day, the vehicle’s value drops to $20,000. If you are one of the many hard-working Americans that pays the Alternative Minimum Tax, you may not be eligible for the federal tax deduction. So buy used to take advantage of it.
The savings don’t stop there. EVs are constantly changing. The new 2016 Chevy Volt has a 40% longer EV range than the 2015, first-generation Volt. It also added a seat, is faster, is more efficient, and does not cost more new. This makes the Volts already in driveways look like yesterday’s donuts. Except to those looking for a bargain. The rapid pace of EV evolution is making the older designs very affordable. Maybe you don’t need the new features and would prefer to have the cash?
Commenting on the great value of used EVs, Anil Goyal, Vice President of Automotive Valuation and Analytics for Black Book said, “Smaller cars have experienced heavier depreciation over the last 12-18 months, but it’s clear that the small mainstream electric vehicles are experiencing even heavier valuation drops.” Black Book used the example of a 2012 Nissan Leaf SV Hatchback. That Leaf had an MSRP of $36,380 three years ago. Since that time, the SV has gotten cheaper and is now sold new at $32,100. This also helps drive down the used price. According to Black Book, the same car today sells for just $7,400. The Volt we mentioned is also a great deal and about to get better as those 2016s start to arrive on lots. The 2012 Volt’s MSRP was $40,431. According to Black Book it now averages $10,500.
Compare that to a used Chevy Cruze that had an MSRP of $20,144 and now sells for $9,850. By comparison, the used Volt is a steal.