Used Electric Cars: About To Get Big, What You Need To Know Page 2

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2014 Mitsubishi i-MiEV

2014 Mitsubishi i-MiEV

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If you think that’s difficult news for Nissan, it’s even worse for Mitsubishi. The 2012 Mitsubishi i-MiEV is selling for a market-average price of $5,750, or $7,000 for those top-condition ones. That’s also not much more than a fifth of the i-MiEV’s original price.

'Back lot' prices for perfectly good, late-model EVs

On both fronts, gasoline-powered no-frills ‘economy cars’ showed far better resale value, with the Nissan Versa and Mitsubishi Lancer worth a much higher portion of their original price (yes, even considering the tax credit) than their EV counterparts. In many cases, the gasoline car actually costs more than the EV in absolute money.

CHECK OUT: Ford Opens Electrified-Vehicle Patents, Adds 200 Engineers To Work On Hybrids, Electrics

Even the Volt extended-range electric car has fallen victim to this trend, with 2012 Volt models now commanding $13,050 on average (just a third of its original cost), or $14,650 in top condition.

Tesla, by the way, is another story entirely. Its cult following, and its different sales structure, very much oriented toward getting trade-ins and paying them close attention, as in a Certified Pre-Owned program, means that even two-year-old Model S sedans are selling at around 80 percent of their original price.

Kelley Blue Book, another top pricing authority tracking used-car prices and residual (anticipated) values, confirms that EVs are continuing to depreciate at a faster pace, on average, than internal combustion vehicles.

READ: Electric-Car Future Is Coming, Just More Slowly Than Predicted: Consensus

“This is a trend that we’ve been tracking since EVs first started to appear in the auction lanes,” said Eric Ibara, Kelley Blue Book’s director of residual value consulting. “The depreciation has been steeper than we initially forecast, so our residual values today are lower, generally speaking, than our initial values.”

A flood of lease returns, cheap gas, and (an unjustified) battery of doubt

Although the Chevrolet Volt might follow a softer depreciation curve, longer-term, because of its 'eco-icon' status and range-extended operation (lifting worry if EV range plummets due to battery degradation), there's likely a continued steep downhill slope ahead for prices on pure electric cars.

“More lease returns are coming back on Leaf later in 2015 and in 2016, and that’s certainly not going to help used electric vehicle prices,” said Anil Goyal, Black Book Auto’s VP of automotive valuation and analytics.

Goyal points to “a number of headwinds” that EVs have against them, at present:

  • high MSRP (making them difficult to justify to own economically)
  • low gas prices
  • government and manufacturer incentives on new cars that drive the used-car price curve to a lower starting point
  • high lease penetration (increasing supply)
  • range anxiety (it’s still a problem)
  • battery life concerns

Yet KBB’s Ibara notes that the company has not been adjusting its residuals down any further due to the recent volume of off-lease cars hitting the market—which may indicate, deeper in the data, that there are indications (energy/fuel price forecasts, for instance) that demand is simultaneously strengthening.

2011 Nissan Leaf owned by Nikki Gordon-Bloomfield

2011 Nissan Leaf owned by Nikki Gordon-Bloomfield

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Taking all this prognostication into account, we don’t think that you should hesitate to grab one of these low-priced used electric cars. Here’s why 3-4-year-old EVs will remain an exceptionally good deal for the remainder of the 2015—and into 2016:

  • The technology in batteries hasn’t changed much (yet). Tesla aside, while we wait for 200-mile EVs, the 5- or 10-mile gain that some existing models have received, through battery improvements and climate-control upgrades probably aren’t going to make a difference.
  • No, electric cars haven’t “bricked,” and the vast majority of batteries have been fine. Unlike in personal electronics, these batteries are designed to last eight to ten years, or more, and have held their range far better than some anticipated. It's likely still plenty for your commute and daily needs.
  • A used EV is cheaper to maintain than a used gasoline car. No question, the lack of an engine, transmission, fuel system, exhaust system, and far fewer components add up to money saved—especially when you get to the years that tailpipe-emitters need some of those things repaired or replaced.
  • What do you have to lose? (...except some gallons of foreign oil, of course)

While this all seems like bad news for sales of new electric vehicles, and while we try to be cheerleaders for electric cars and getting to the economies of scale where EVs are profitable, it’s hard to ignore the screaming deals on the used side of the market. If you want to make the jump to an EV and think the lease deals are great, buying a three-year-old Leaf or i-MiEV will likely cost you even less.

Click over to the next page to see which pure electric cars you’re most likely to find used, then go take advantage of those deals this summer, before everyone else finds out.

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