A few years ago, dealers couldn’t give them away. Now used electric vehicles are in high demand as high gas prices continue to break new records.
Unfortunately, electric vehicles (new and used) are in short supply, a situation that is due to the huge increase in demand over the last year that is going against the historically low market share of electric vehicles. The global supply shortage that has decimated the supply of new cars and put enormous upward pressure on the prices of all used cars hasn’t helped either.
As a result, there aren’t many used electric vehicles out there, and if one is available, it’s likely to cost a lot more than it did a year or two ago.
Used prices are new prices
In the not too distant past, the best advice for used car buyers was to go where there were no profit margins.
Today, however, the best advice is to avoid the market altogether, unless you can’t do it at all. That is perhaps even truer for the used electric vehicle market than for conventional internal combustion vehicles, which are in greater supply.
“There’s not a lot of availability, so the prices of the used electric vehicles that are out there are going to be higher, just like with the new car market,” said Sam Abuelsamid, industry analyst and electric vehicle specialist. from Guidehouse Insights and a forbes wheels taxpayer.
On average, prices for used electric vehicles have risen more than 25% in the past year, said Scott Case, chief executive officer of Recurrent, a battery health provider that has been tracking the used electric vehicle market for years. late 2020. Popular models, like the four Tesla models – which account for more than 40% of new EV sales and have begun to dominate used EV charts as well – have risen even higher.
A major online seller, Carvana, had only a few thousand electric vehicles on its national used-vehicle listings in early June, and 90% of them were marked “purchase pending,” said Veronica Cardenas, a spokeswoman for Caravan. The site has over 32,000 car listings of all types.
A few tips may make shopping a little easier for anyone heading into the used electric vehicle market, but it helps to understand how we got here.
The first modern electric car, Nissan’s Leaf, was launched 12 years ago.
For much of the next decade, most automakers and buyers ignored electric vehicles and relegated them to the few states where regulators and consumers saw value, whether environmental or economic, in cars that didn’t burn fossil fuels. and they emitted toxic gases that damage the climate. .
It’s hard to get an exact count of used electric vehicles on the market. Offer changes daily and private seller listings are not tracked. But Recurrent’s Case said the monthly average in the US for the first half of 2022 was between 15,000 and 20,000 used electric vehicles. That’s not much compared to the 2021 national average of 3.4 million used car sales a month.
Adding to the pain for those looking for a decent used EV, much of the supply is stacked in a handful of states, like California, Florida and New York, that have encouraged EV sales.
Due to high gas prices and vehicle shortages, many EV owners are sticking with them rather than swapping and upping them, so the number of used EVs is only a quarter of what it should be. be, Case said. forbes wheels.
While there was only one all-electric car model in the US in 2011, there were 24 models from 13 brands as of early 2022, with more than 100 models expected by 2030. That kind of volume will help create a larger stock. large number of used models. in the future.
Right now, though, there are about 290 million registered cars, trucks and SUVs in the US and only 1.6 million all-electric vehicles have been sold since that first Leaf in late 2010. That’s only half. one percent of the total group. of registered vehicles.
Add in high gas prices, and the expectation that they will continue at or near all-time highs for at least the rest of the year, and the upward pressure on used electric vehicles is easy to understand.
Used electric vehicle prices have been inflated at three times the rate of general inflation, which now stands at around 8.5%.
These are just snapshots, as availability and prices change frequently, but they do illustrate what the market is like:
- The selling price in Southern California for a 2018 Nissan Leaf SV with less than 30,000 miles on the odometer averaged around $20,000 at the end of 2019. Today, the average for the same make, model and mileage is around $25,000.
- Extended-range BMW i3s of the same age and mileage also averaged $20,000 at the end of 2019. The CarMax franchise in Irvine, California had nearly a dozen in stock. In early June, CarMax listed just two discontinued i3s available nationally, and the asking price for the only 2018 model available, albeit with less than 10,000 miles on it, was $35,998.
- A lots of use Teslas, especially the more moderately priced Model 3 that starts at $46,990 new, now cost as much as identically equipped new ones. That’s thanks to high demand making it hard to find new models in stock. That’s a three to six month wait, according to Tesla’s website. Tesla’s used car inventory in early June only had 66 used Model 3s. CarMax listed 160 used 3s, all priced similarly to comparable equipped new model 3.
Ease shopping pain
If waiting until things settle down isn’t an option and budget is a concern, there’s not much the average consumer can do to avoid today’s high prices for used electric vehicles, warned Mark Holthoff, editor senior of Carvana’s research channel and founder of used car site Klipnik.com.
But there are 10 things you can do to avoid paying too much or buying a lemon:
- Look for models that have been available for more than two years. and they sold pretty well when they were new: EVs like the Nissan Leaf, Chevy Bolt EV and Kia Soul EV, and discontinued Volkswagen e-Golf. Used-market availability can be relatively high and priced lower than some of the newer electric vehicles, many of which were introduced as luxury or near-luxury models and command higher used-market prices.
- Realistically assess your daily driving needs and buy old models It didn’t have much range to begin with, but it can be a good vehicle for short commutes, running grocery errands, and taking the kids to and from school and their various local activities. With electricity running at less than 25% of the cost of gasoline on a miles-per-gallon-equivalent basis, every mile traveled electrically represents a significant savings compared to driving in an internal combustion car.
- Check pricing guidelines onlinelike KBB.com, to get an idea of what a good average price should be for the make and model you’re interested in, and don’t go too high.
- If you buy from a private seller, ask how often the car was charged to 100%. Frequent charging to full capacity can accelerate battery degradation, especially on older models like the Leaf that don’t use battery cooling systems.
- Attempt avoid vehicles that were primarily operated in places with very high temperatures—is another waste of battery life.
- If financed, consider certified pre-owned models of franchised dealers. Those often have much lower interest rates than non-certified pre-owned models.
- Attempt get a battery status reportPrivate sellers may allow you to take the car to a mechanic or dealer who performs such tests, and used car dealers may perform battery checks on used electric vehicles they sell. Most electric vehicles also have a readout on the dash that shows the battery capacity. Recurrent offers online battery health comparisons.
- Buy from dealers or online sites that offer warranties on used vehicles. Some also perform free battery checks.
- Ask dealers if their used electric vehicles are from auction houses and if the battery status was checked. Auto auction group Manheim performs battery checks and rates EVs, so dealers know what they’re bidding on.
- Don’t be afraid to look out of state. California, for example, accounts for more than 40% of all electric vehicles, so it has the largest supply of used electric vehicles, which could mean lower prices and more options. Even if the asking prices are the same, the actual cost of purchasing a used electric vehicle may vary from state to state due to motor vehicle and sales taxes.