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Is purchasing a used electric car a sensible financial move?
One thing that’s certain is the fact that a few of the same concerns which have dampened widespread acceptance of plug-in cars, particularly about battery range, have held back secondhand sales. At the same time, that reluctance is making many used models almost ridiculously cheap.
A used electric vehicle or plug-in hybrid can represent a genuine deal for the thrifty shopper who would like to go green and is willing to do a bit of try to find the right car.
A few years ago, there have been very little used plug-in vehicles to be had. The Nissan Leaf and Chevrolet Volt, the first modern mass-produced battery-electric and plug-in hybrid vehicles, respectively, weren’t launched until late within the 2011 model year.?Leases didn’t start running out before the beginning of 2014, and since the cars initially were bought from merely a handful of states, availability and selection were?limited.
But presently there are almost two dozen models of battery-electric vehicles, or BEVs, and plug-in hybrids, or PHEVs, and many are available new in most 50 states. That means used models can be found through the country.
The marketplace for used plug-in cars still isn’t as bountiful as the standard car or truck market. After all, plug-in vehicles account for no more than 1% of new passenger vehicle sales. But it’s?growing as more models appear lease or are traded in through the original purchasers.
Lease returns constitute a substantial portion of the late-model car or truck market. Fifty-one?percent of all new BEVs and 73% of PHEVs are leased, compared with just 32% of gasoline cars, based on auto market information provider Edmunds.com.
On a recent stroll through used-car giant CarMax’s online national inventory catalog, NerdWallet found 390 used plug-in vehicles among 29,000 model year 2011-2016 used cars available at CarMax dealerships that day. Add the hundreds of used PEVs available through major carmakers’ franchised dealerships, and you may see that you might, after some effort, be able to find a used PEV to suit your needs.
If you need to do go shopping for a second hand PEV, particularly if you’re in the market for a battery-electric model, you will find the biggest selections in the number of states which have actively promoted sales of zero- and low-emission vehicles.?California has the biggest pool of used plug-in vehicles, especially BEVs, accompanied by Colorado, Florida, Georgia, New York, Oregon and Texas.
Even if you’re in a state with little if any choice of used plug-in vehicles, some dealerships will do business with others to get you the car you would like. You just need to ask. (There might be transportation charges.)
Low demand, low prices
While PEVs typically fetch hefty technology premiums when new – those batteries aren’t cheap – almost all models depreciate faster than conventionally powered vehicles.
Most BEVs?have experienced depreciation rates of 60% to 75% in three years. That compares with depreciation of 45% to 50% for most conventionally powered vehicles in the same period. The Tesla Model S, which features frequently updated electronic features, bigger batteries and longer range than other BEVs, is?a lot more like conventional cars, with three-year depreciation running at approximately 40%.
Plug-in hybrids hold their value slightly much better than BEVs but still depreciate faster, usually, than conventionally powered cars.
One reason behind the quick depreciation is that early adopters, the prospective market for cars with plugs, have a tendency to buy new to make use of the newest features, including longer-range batteries, says Eric Ibara, used-pricing director at Kelley Blue Book. Aside from?used Teslas, “the prospect of owning a 3-year-old EV isn’t that appealing to most,” he says.
Concern about battery range also is a big factor in used PEV values, says Ivan Drury, an Edmunds.com analyst.
All PEVs typically carry eight-year or 100,000-mile warranties on their battery packs, and PHEVs’ batteries can be warrantied for approximately Ten years or 150,000 miles in certain states, including California. But batteries do degrade a bit each year, creating a degree of uncertainty when considering a used plug-in vehicle. One which was EPA-rated to visit 80 miles on the charge when new may be good for just 60 to 70 miles when it’s?3?years old.
The fact that automakers regularly introduce new models with longer driving ranges also weakens used PEV values, Drury says. For example, the 2017 Chevrolet Bolt BEV is anticipated to provide a minimum of 200 miles per charge, as is the next-generation Nissan Leaf.
Another unknown affecting resale values is the price of replacing battery power pack. Few used PEVs today are in danger of deteriorating their batteries – a prospect that buyers of 6- to 9-year-old models will eventually have to face. But which means nobody really knows just how much replacement batteries will cost when the original warranties expire. There’s no marketplace for them yet.
Additionally, new BEVs and PHEVs are eligible for hefty federal tax credits and, in some states, for state and local incentives as well. That reduces the real cost to those who lease or buy new, but comprising those new car “discounts” also pushes down values on the resale market.
All the standards that accelerate depreciation of plug-in vehicles could make used models very good deals.
It’s quite normal to see 2013 Nissan Leaf BEVs that were costing $35,000 approximately when new listed at $10,000 to $13,000 now.?2014 Chevrolet Volts, almost $40,000 new, routinely sell in the $16,000 to $19,000 range.
Something more exotic on your mind? Most 2014 BMW i3 BEVs, which started at near to $42,000 new, are in the $27,000 to $32,000 range these days.
While Leafs and Volts would be the most plentiful models on the used markets, there are lots of others to be found – while you might need to do some searching. Most dealerships list inventories online nowadays, and there are lots of car-buying apps available on the market, making the hunt a little easier.
Keep in mind
When considering a used plug-in vehicle, remember that BEVs depend entirely?on batteries that degrade with age and use. Models with heavy mileage for their age are likely going to deliver less range than lower-mileage models.
Plug-in hybrids, however, work like regular hybrids when their battery charge is depleted. Their batteries aren’t as heavily stressed as BEV batteries, so they tend to keep going longer and degrade more slowly.
A used BEV is a great bet for any second car used primarily for short commutes and shopping trips (Teslas, once more, would be the exception). A used PHEV, however, might serve all your needs. Check our electric car decision guide for pointers that can help you decide what’s best for you.
John O’Dell is a longtime automotive writer who has covered alternative-fuel cars for the La Times and Edmunds.com. He now runs the website?Saving money Car Guy.?Email:[email protected].