The Chevrolet Volt and Nissan Leaf are in the critics’ spotlights yet again, and this time it’s how little value is left after only a few years of ownership.
First, Wired looked specifically at the Leaf, which can be leased for a ridiculously small amount: $2,400 down and $199 a month for 36 months. The reason the payments are so low? Maximizing the various incentives and credits, including the $7,500 one from the federal government.
“The financing company that buys the new car from the automaker gets the full tax credit, so it can pass on those savings to the lessee in the form of lower monthly payments,” Wired wrote.
But the push to get customers into new Leafs put a big dent into the used values, which according to Kelly Blue Book, figures a 2012 Leaf with only 33,000 miles should sell for $15,000, a huge loss compared with its original $32,000 MSRP.
“It’s hard for used EVs to compete with lease rates so low because the tax credit isn’t passed down,” Wired continued. “If you put 10 percent down on a 4-year term at 4 percent interest [on the $15,000 used Leaf] you’re paying $305 a month. Throw in the fact that we don’t have a good handle on how EV batteries degrade over time (though most have good warranties), and there’s no reason not to grab a new one.”
Same goes for the Chevrolet Volt, which according to noted critic Mark Modica of the National Legal Policy Center, suffered even worse losses.
“A search on the Manheim auction site, a primary indicator of vehicle wholesale value, shows that 81 Chevy Volts, model year 2012, were sold at auction for the week ending August 2nd,” wrote Modica. “The average price was $14,871 for vehicles that are only two or three years old, primarily coming off of the manipulated leases. That equates to an absurd loss of values for Chevy Volts of about 65% in only two or three years.”
While the math is pretty dismal, the automakers certainly had some advanced warning. A Pike Research report back in 2011 suggested pretty much the same thing, with residuals of three-year-old Leafs and Volts being in the low-40 percent range. However, the prediction was that as customers became more comfortable with the technology and gas prices remained high, values should slowly rise.