Used Hybrid, EV Prices Falling, Means Great Deals for Buyers
We are in a unique trend for the classic car market. While you may think that only vintage sports cars are the type of used cars that grow in value, but the reality is, late model used car values are actually on the rise. But it is not all rosy for used car salesman, as the exact opposite is happening for hybrids and electric vehicles. According to Edmunds, the average price of a used car jumped by 7.6 percent in the second quarter of this year, reaching a record average high of $18,800. But a Forbes report shows how a perfect storm of market forces are taking a toll on the fuel-friendly end of the automotive marketplace, resulting in great deals if you’re looking for an eco-friendly used car. RELATED: See images of the 2016 Cadillac ELR Hybrid
The National Auto Dealers Association recently released its Electric Vehicle Retention Report Card, indicating a big drop in the trade-in value of two year old cars. The report says that some of the cheapest plug-ins are returning only 20 percent of their original value. It appears that EVs are losing value more quickly than used hybrids.
The biggest reason for this drop is the alt-fuel market’s oldest enemy; cheap gas. The country has been enjoying a period of low fuel prices. And the strength of the hybrid/EV market has always been inversely proportional to fuel prices. With gas still costing around a dollar less than a year ago, buyers develop a short memory and go for cars other than fuel-sipping plug-ins and hybrids.
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The other factor is the result of incentives to buy the first round of hybrids and EVs. According to the Forbes report, there are a large number of alt-fuel vehicles that are coming off heavily subsidized leases. 85 percent of Nissan Leafs were leased last year, and it is expected that their residual value will be thousands less than the original estimates.
Then you have the incentives on new hybrids and EVs. You can still get as much as $7,500 off certain electric vehicles, and then automakers throw in their own incentives to sweeten the pot.
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Finally you have the purely psychological reasons detracting from hybrid and EV prices. We don’t need to get into the details of “range anxiety” other than that people consider how far they have to drive on a daily basis when buying a car. The other factor is the quality of the battery as the vehicle gets older. Some buyers are fearful that the old battery might lose its range or effectiveness. But many hybrids have longer warranties for hybrid components, and there has been a proven record of used Prius models on the road that are doing just fine.
What these market forces and mental hangups mean for the eco-conscious consumer is a used marketplace full of late model hybrids and EVs that are extraordinarily good deals.