Used plug-in electrified vehicles can be a good deal for car shoppers willing to do a bit of homework.
The selection of all-electric and plug-in hybrid electric vehicles available for resale is growing, and consumers will need to consider where they live, value depreciation, the battery, and other factors. Longtime automotive writer John O’Dell laid out purchase considerations for used plug-ins for Christian Science Monitor.
Some of the same considerations affecting new PEV sales, including battery range, have held back their used car sales. That’s making used PEVs even cheaper, according to O’Dell.
It’s still early in the game, with 2011 model year Nissan Leafs and Chevrolet Volts coming off lease starting in early 2014. With these first mass-produced PEVs only being sold in a handful of states, availability and selection of used Leafs and Volts were very limited.
Now there are nearly two dozen PEVs available as new models in all 50 states. Used PEVs are starting to show up throughout the country.
The supply is limited, with PEVs consisting of less than one percent of new vehicles sold in the U.S. Used PEV supply is growing as more models come off lease or are traded in by the original purchasers.
Most of them are coming off leases. Fifty-one percent of new all-electrics and 73 percent of plug-in hybrids are leased, compared with 32 percent of traditional gasoline cars, according to Edmunds.com.
NerdWallet, a personal finance website, recently analyzed used-car giant CarMax’s online national inventory catalog. The research study found 390 used PEVs among about 29,000 model year 2011-2016 used vehicles available that day through CarMax dealerships. If you add the hundreds of available used PEVs through automaker’s franchised dealerships, the selection broadens for car shoppers.
As has been witnessed in new PEV sales, geography matters quite a bit. California, with its leading role in new PEV sales, has the largest pool of used plug-in vehicles, especially all-electric models. California is followed by Colorado, Florida, Georgia, New York, Oregon, and Texas. In states with little or no used PEVs, some dealers will trade with others to find the PEV the car shopper is looking for; but there may be transportation charges added.
On the value depreciation side, battery electric vehicles have taken the biggest hit with depreciation rates of 60 percent to 75 percent in three years. That compares to 45 percent to 50 percent for most gasoline-engine cars during that same time period. The Tesla Model S is the exception to the rule, with three-year depreciation coming in at about 40 percent. Plug-in hybrids have also done a little bit better in value depreciation than most battery electric models.
Battery range is a big factor in used PEV values, according to Ivan Drury, an Edmunds.com analyst.
As more attention shifts to upcoming longer-range models like the Chevy Bolt, the pressure is mounting, Drury said. There’s also battery degradation, where an electric car that originally had an 80 mile EPA rating might have been reduced to 60-to-70 miles per charge after it reaches three-years old.
The cost of replacing a PEV’s battery pack is another unknown factor affecting resale values. They’re still too early in the market for consumers to find out what a battery replacement will cost once the original warranties expire.
Attractive new vehicle incentives have also hurt used PEV sales. With hefty federal tax credits and a few states offering incentives that make new PEVs much more affordable, used PEV values have been softened because of it.
O’Dell did some homework on attractive deals available to consumers. You can typically find a 2013 Nissan Leaf which was originally priced (pre-incentives) at $35,000 that’s now listed at $10,000 to $13,000 as a used car. A 2014 Chevy Volt that sold for nearly $40,000 new can be purchased used in the $16,000 to $19,000 used price range. The 2014 BMW i3, which started at close to $42,000 new, can be purchased at about $27,000 to $32,000 used, according to O’Dell.
A used battery electric vehicle tends to work well as a second car used primarily for short commutes and shopping trips, with used Teslas being the exception. A used plug-in hybrid might serve all your needs, O’Dell said.