Why Are USED Electric Vehicles So CHEAP? And, NO, it’s not obvious!
Why are used EVs so cheap? With the average electric vehicle depreciating to the point of losing over half of its value in three short years, US News runs a collection of some of the worst losers with the Tesla Model S leading the charge with 62% depreciation. Why, in fact, do many of these electric vehicles depreciate so hard. And why are they so cheap on the used car market? Life’s too short to drive boring cars. With more and more choices on the market of brand new electric vehicles built by car companies like Volkswagen, Ford, Hyundai, Kia, you name it, just about every manufacturer is going pure EV to some level. Once those vehicles become hit the used car market, clearly there’s a lot of great choices out there. But why in fact are they so cheap? If the advancements are making vehicles easier to use, better with better range, why are used electric vehicles so cheap? But the bigger question is, if you’re going to buy a Tesla and any other electric vehicle in the used car market, does it make sense to actually buy one? With all that massive depreciation, you get all this technology that literally cost twice as much money a mere three short years ago. I you get LEDs, you get all the great tech in the modern-day Teslas or any of the other electric vehicles, and you can do it for pennies on the dollar. Battery life has partially been consumed, but does it seem like good value? It doesn’t make sense to buy an ID4 like this after about two or three years and you’ll find this vehicle goes down in value by as much as 51%. That’s right, only 49% of the value is retained in three short years for a Volkswagen ID4. You have all this technology wrapped up in one neat little package. Of course, beautiful alloy wheels, flush handles, all kinds of greatness here, but remember they’re highly incentivized. They’re pushing them out the door with big incentives. So, a big part of the problem was here’s a small subcompact SUV. You’re looking here, we have a Chevy Tracks and Beyond, but the thing is this is essentially a Bolt EV or EUV, but the difference is the EUV version cost a lot more money than these vehicles did. These are about $18,000 less to get into one of these smaller subcompact gas versions. And that’s a big reason why a lot of people weren’t willing to pay the brand new prices for vehicles, of course, that were based on a tracks, but were electric motivated. So, that’s why a lot of those prices are going down drastically on the used car market. And here’s another example. People fear a lot of electric vehicles. There’ve been lots of stories about vehicles burning, but internal combustion vehicles burn as well. A lot of the vehicles we’re hearing about have caused catastrophic fires. Of course, in many electric vehicles, and people fear for that, but it really ties up to more with the reliability aspect. People are scared after warranty, which is typically after 3 to 4 years, that warranty is gone. Therefore, the depreciation hits extremely hard. People don’t want to take a chance. They don’t know how to fix it. They can’t fix it at home. and they need a specific set of scales to actually fix their car. That’s also one of the other conditions that a lot of people are concerned with. That’s why the used car electric vehicle prices have fallen off a cliff. With the popularity recently dropping on electric vehicles, more people are choosing to go back to gas engines. On the used car market, it’s a compelling conversation when used electric vehicles are less than half of the what they were brand new. But ultimately, there’s a tax credit is a big reason why a lot of people buy the brand new vehicles. Here we have a little Kia. We’re talking about a lot of these electric vehicles are obviously subject to federal tax credits. And a lot of those tax credit returns come in the form of say $7,500. And when you get $7,500 off, a lot of people are willing to buy these cars. They want to get some money back. People buying used cars in the electric space don’t get the same tax credit. They want that value added to their proposition. Now, they don’t say it. They don’t negotiate it, but it’s implied and inferred in the fact that people aren’t willing to pay full willy-nilly, and they expect to see that kind of money off, discount, bottom line. So, federal tax credit is another major reason why a lot of these EVs are much cheaper on the used car market. Another concern people have is the electric battery life. If you’re buying a used electric vehicle, it might be 5, 6, 7 years old, and there’s a lot of conversation about some of these batteries maybe only being good for 10 or 12 years. So that drastically reduces the service life of your vehicle. If you’re facing an imminent battery replacement in 2, three, four years to change this out and get it back on the road, that could cost you 10, 15, 20, 30, $40,000 depending on the side of the battery. That could be a huge expense. And a lot of people don’t simply want to take on that. A lot of reason why you get into electric vehicles to save money, save cost. Some people feel it’s the environment, but ultimately it’s save dollar out of your pocket. But if all you have to do is turn around and drop a battery in there for $25,000 after 2 years of use, you’ve hardly saved a dime. And in fact, you might be much further behind. Another issue I find that a lot of people in the used car market aren’t getting on board with are sometimes the used vehicles. If you’re buying the standard range, those are the ones that are the most cost effective. Those are the ones that you find have the best deals. But I took a car like this out here this weekend. I actually test drove a Mustang Mache in their base trim. Had the all-wheel drive, but it was only rated for something around 350 km. and that’s in optimal weather. The worst part is while they look great, they’re fun vehicles, they absolutely have some great space and the performance wasn’t bad. It wasn’t exceptional. You need to step up for the dual motor to get the better performance. And the styling is great. It definitely has a little bit of this detailing on the back. This one’s a GT. This one goes a little bit better. The fact remains is in the base model, you’re barely getting over 300 km per a charge. And unfortunately when it gets really cold and as it does in the prairies like this now you’re dealing with 150 200 mile range or km range that may not even barely get you to work back in the morning. And unfortunately people are worried about range anxiety whether it’s in the cold weather whether you miss on a charge you don’t know where the charge stations are or you just have a base model. There’s even a Mitsubishi I saw IEV which only has 150 km round trip that’s all you’re going to get. Even base trim Teslas aren’t going to get you all that far. So range anxiety is a huge concern. Another issue people have is chargers and charging stations. That hasn’t gone away. The infrastructure has slightly increased, but the unfortunate reality a lot of people are finding that some of these charging stations when you pull up, they’re damaged. They’re out of service. Sometimes you don’t have the right charge. If it’s a level two charger, you may still have to wait for 6 to 8 hours. Even if it’s a level one charger and you’re plugging at the household, you’re going to have to wait 24 hours or more for a charge. The level three charger will get you the full boost. That still gives you only 30 to 45 minutes. And a lot of times people just don’t want to wait around. Busy lives, people just don’t want to wait. Even with the reduced price of a lot of these EVs, a lot of people still can’t get over the fact that they’ve got to wait around for their vehicle to charge. There’s another strong reason why a lot of these electric vehicles continue to dive off the platform of value. Mercedes brands EQE, EQS, EQB, those all are dropping at a drastic rate. I know somebody who actually had an EQS traded after 2 years and lost over half of the value in 2 years. But a lot of it is also lease returns. That’s the big one. When what we heard with Hertz a couple of years ago flooded the market with a lot of their used vehicles. They were trying to unload a lot of their electrical fleet. And the main reason was expensive insurance, you know, maintenance costs and just the idea of depreciation. They wanted to get rid of them. So there was a flood of the market as there typically is even with a lot of the leases after 2 to 3 years they hit the market. Now you actually have a situation with too much on the market and especially around a marketplace that’s dying. And what you’re finding now are there’s less and less people buying even brand new ones. So with the combination of less interest on the new market transfers down, less interest on the used market, and those that do come down, many are leased because people are scared to own them. And naturally, the value just vaporizes once there’s far too many on the market. Every single year, there’s even more interesting electric vehicles with better state-of-the-art batteries, better technology, more range, more features, and that constantly has this push to people to shop for something a little bit newer. The incentives of course are stronger on newer and with the new technology that of course naturally drives the prices of used down even further. And of course with all that said, if you’re wondering about some of the other used vehicles that are particularly cheap, check out those links right there. You’re going to love it. Hope to see each and every one on the next one everybody. We’ll see you real soon. Bye-bye.
Why Are USED Electric Vehicles So CHEAP? And, NO, it’s not obvious!
All EV’s depreciate so aggressively these days, but why? It may be range issues, battery life, or rapidly changing tech but, WAIT, there are other reasons lets talk. about this as there may be amazing deals.
Why are used EVs so cheap? 🤔 In this video, we explore the used ev market and the shocking ev depreciation that leaves models like the Tesla Model S with drastic price drops. Discover why these electric cars are not only affordable but also the best used ev options available today! 🔌💰
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