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The average resale price on a used Nissan Leaf has reportedly dropped to half the cost of a brand new model.
As of last month, the price for a used Leaf has fallen to an average of $15,238, said Cars.com Senior Editor Mike Hanley. He named the EV as the vehicle with the biggest price drop in March.
“Since the start of the year, Leaf prices are down 9.6 percent,” said Hanley. “Only the GMC Savana 2500 (down 13.8 percent) and BMW 528i (down 11 percent) have fallen more.”
In comparison, a base model 2015 Leaf S costs as little as $29,860.
Pat Hoban, owner of new car dealer Capitol City Nissan in Chamblee, Ga., has already noticed that few customers are interested in buying a pre-owned Leaf.
“Used Leafs haven’t really taken off,” said Hoban. “There is really no incentive to buy a used one when you can lease a new one for less.”
The Leaf isn’t the only alternative fuel vehicle with tumbling resale values. According to The Wall Street Journal, last year the average trade-in value on models such as the Ford Focus and Toyota Prius fell by as much as 35 percent.
Even a new 2015 Toyota Camry Hybrid, which was picked as Kelley Blue Book’s alternative energy car with the best resale value, is predicted to maintain only 59 percent of its value in three years.
The Tesla Model S appears to be one of the rare exceptions, with values for the 2013 model averaging 71 percent of the purchase price. In comparison, The Wall Street Journal said used Volts are valued at 39 percent of their original price.
Values aren’t dropping for the used car market as a whole. In fact, Hanley noted that on average, used car values have increased by 1.3 percent since the beginning of the year.
Concerns over aging batteries, competition with low gas prices and the lure of more advanced technology are some of the reasons buyers are swayed to turn in their leased Leaf in exchange for a new model.
This is building into a problem for carmakers like Nissan, who had predicted that used Leafs would be worth $4,000 to $6,000 more.
But for buyers, it offers an opportunity to purchase a used hybrid for a fraction of the new car’s price.
Hans Saverio recently spent $15,000 for a 2013 Leaf with 11,000 miles, similar to the one pictured at the top of the article.
“I was shopping for quite a few cars but the Leaf was by far the cheapest,” said Saverio. “I thought it’d be more like $21,000 to $22,000.”
As carmakers build their prices for the upcoming 2016 models, the need to balance the value of lease returns with an attractive monthly payment will surely weigh heavily in their calculations. Set the price too high, and sales may falter. But lease payments that are too low will leave manufacturers holding excess inventory that’s overvalued, just as Nissan is now.