Used EVs Plunging in Value

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MrDRMorgan

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The Spark EV is not mentioned in this article but the article gives a scary look at the future value of used EVs. I hope, for those of us who leased our Spark EVs, that the buyout at the end of lease will be significantly lower than that quoted on the lease contract. Here is the article:

Used EVs Plunging In Value — And Could Give Savvy Shoppers A Jolt
Steven Lang, Yahoo Autos‎ July‎ ‎16‎, ‎2015

Right now used electric vehicles are experiencing a colossal loss of market value.
How bad is it? A typical new car has a depreciation of roughly 15% a year. Imagine if you owned a new vehicle that lost over 7% of its value— in one month. That’s what just happened to the Nissan Leaf.
Over the past month, Nissan sent well over 500 off-lease Leafs to wholesale auto auctions throughout the United States. And the resulting prices were shocking.
It took several billions of dollars to make this glut of used electric vehicles a reality. Beyond the $7,500 federal tax credit for electric vehicles, several states and public utilities have offered their own tax credits of between $1,000 to $6,000. On top of this financial frosting, new EV consumers were given a slew of helpful incentives from the installation of free local charging stations, to the use of HOV lanes and a substantial reduction in their annual registration fees.
It was a fun and surprisingly cheap decision for those who could afford to buy or lease a new EV. But outside of Colorado and parts of southern California, there are no similar incentives for buying used EVs — and with oil prices still low, not as much natural demand for alternative-fuel cars as some automakers had expected.
Model Est. Retail Value 7/2015 Est. Retail Value 7/2016 Forecasted Loss of Value Annual Depreciation

2013 Nissan LEAF SL, 14,900 $7,650 $7,250 48.70%
2012 Mitsubishi i-MiE $7,950 $4,400 $3,550 44.70%
2013 Tesla Model S Performance $74,000 $52,600 $21,400 28.90%
2013 Chevy Volt $18,600 $14,800 $3,800 20.40%
2013 Ford Fusion Energi Titanium $25,600 $23,100 $2,500 9.80%

Manheim Auctions, a liquidator of over six million wholesale cars a year, has forecast that the average used 2013 Nissan Leaf will only be worth $7,650 by July 2016 compared to today’s average retail value of $14,900. As you can see above, the Leaf may have plenty of company in its all-electric misery.
 
Thanks for posting this.

(Link to article: https://www.yahoo.com/autos/used-evs-hit-by-plunging-values-could-give-savvy-124255982617.html.)

As a Leaf lessee and enthusiast, I can attest to the Leaf's resale value being terrible. It's great for used Leaf buyers though...

FWIW, I'm going to probably buying a used '13 Leaf SV w/only premium package (and NO QC (CHAdeMO inlet) + LED headlight package) this weekend to replace my leased '13 Leaf SV w/both packages. Leased Leaf is going back at end of month.

The car had about 24K miles and the dealer got it at a Manheim auction for $8K + $325 auction fee (he got lucky). I will be buying it for ~$9325 + tax and fees. Car's in good shape except that it needs new tires soon.

There was another that w/the same equipment and trim, but newer tires but different color (red instead of blue and light (easily gets dirty) interior instead of black). He thought that one would go for less but apparently, someone who didn't know what he was doing bid $9100 for it.
 
Nature of the beast I wouldn't worry about it too much and anyone in the used car market for EVs is in luck and it could be a good way to get people on board before they buy a new one.

EVs are treated like electronics...and we know how poorly used electronics holds its value. It'll change the dynamics of the used car markets for sure.
 
I did not buy my '11 Volt to worry about the resale value, I did so to drive it. I don't plan on selling it anytime soon...

Same with the Spark, although we leased it, we just drive it and let someone else worry about the depreciation.
 
cwerdna said:
FWIW, I'm going to probably buying a used '13 Leaf SV w/only premium package (and NO QC (CHAdeMO inlet) + LED headlight package) this weekend to replace my leased '13 Leaf SV w/both packages. Leased Leaf is going back at end of month.

The car had about 24K miles and the dealer got it at a Manheim auction for $8K + $325 auction fee (he got lucky). I will be buying it for ~$9325 + tax and fees. Car's in good shape except that it needs new tires soon.
Bought the above car tonight for the price I mentioned.
 
Interesting how the Tesla retains value better than an "economy" leaf. Typically the more expensive the car the greater the depreciation. Guess the halo car and brand image is working for them.

I wonder why they used a 2012 miev. I don't think it's been discontinued...yet.
 
ImTedBell said:
Interesting how the Tesla retains value better than an "economy" leaf. Typically the more expensive the car the greater the depreciation. Guess the halo car and brand image is working for them.
Indeed. I suspect many folks going in (both new and used) on Tesla Model S are (blissfully) unaware of their dodgy reliability, at least with respect to their drive units, which seem to get noisy and require replacement, often by 10K - 15K miles. I suspect the odds of a Model S making it to 60K miles on its original drive unit are pretty low.

There are MANY threads and posts on this, just skim http://www.teslamotorsclub.com/showthread.php/29834-Drive-Unit-Replacement-Poll. Many folks have had their drive units replaced multiple times, not just Edmunds (see Maintenance & Repairs of http://www.edmunds.com/tesla/model-s/2013/long-term-road-test/wrap-up.html). Edmunds had theirs replaced for noise, then total failure, then noise again, all within 17 months and ~30K miles. None of their drive units saw more than ~12K miles.

A few more of MANY examples:
http://www.teslamotorsclub.com/showthread.php/36414-Model-S-Not-Ready-For-Commercial-Use-Prime-Time-Can-I-afford-to-own-this-car and http://www.teslamotorsclub.com/showthread.php/36414-Model-S-Not-Ready-For-Commercial-Use-Prime-Time-Can-I-afford-to-own-this-car/page11?p=775682&viewfull=1#post775682
http://www.teslamotorsclub.com/showthread.php/29834-Drive-Unit-Replacement-Poll/page29?p=1071441&viewfull=1#post1071441
http://www.teslamotorsclub.com/showthread.php/29834-Drive-Unit-Replacement-Poll/page28?p=1046037&viewfull=1#post1046037
 
The thing about Tesla drive units is they're unlike the motor in a ICE. They are engineered to be easy to swap out. As such, when they have problems covered under warranty, rather than an extended evaluation and repair in-situ, Tesla just swaps them for refurbished units and returns the car to the owner. They can then examine and repair the failed unit without impacting the customer. Since all of this is still covered under warranty, you end up with a happier customer. We don't know what the cost of similar work will be when it's not warranty work, and won't for at least a few more years.
 
Oh dear! Oh my! :eek:

Yes, EV's are sort of like electronics. Early adopters take a hit and we all are definitely early adopters. I remember my $800 VCR. Wait and take your lumps or realize there probably will be a hit and enjoy having it now. I've certainly enjoyed the Spark!

I never considered buying the Spark outright. I figured by 2017 technology would advance. Now I figure I'll get a Bolt when the lease is up. (Of course, if the price is right.....) I just hope the leasing companies don't get scared off of EV's.
 
I'm not so concerned. Plan to own the car for at least 8 years , with arranging for free charging, break even cost will be achieved in 6 years for TCO including, maintenance(tires, brakes, etc.) and juice (fuel). What will suck is when I trade it in for a BOLT or Tesla Gen3 car. It could really be a shocker then.
 
Chaconzies

I don't think you can re-negotiate a lease during the lease, they got you signed, made their money and moved on to the next customer. The value or savings is another issue.The savings are calculated as savings in fuel money that would be spent in a year because free charging has been arranged in my case. If I paid for the electricity it would take years longer to break even. There is the amount of usable battery left issue as well. How many years usable and how much replacement batteries will cost in the future is a guestimate.

Chaconzies said:
So with this in mind would it be possible to renegotiate the price of the lease during the lease?
 
^^^
Yeah, I've not heard of being able to renegotiate a lease once it's begun. However, Nissan was offering 12 month extensions for the price of 10 months to those on 2-year leases. For those who have low monthly payments, that might make sense. Mine was high since my '13 Leaf SV had both option packages and I put down $0. I would also need new tires since the stock tires won't survive for me for another 12K miles.

I don't recall what the deal was w/those w/3-year leases, if any.

There were also offering buyout discounts: http://insideevs.com/nissan-announces-up-to-7000-credit-for-buying-your-leased-leaf/. The discounts were initially smaller, I was initially offered $5000 off buyout on mine, which became $6500. Unfortunately, the end price for mine after $6500 (would be ~$14,401 + tax and license) was about $3K to $3.5K above the equivalent car in the used market.

So, my leased Leaf is going back tomorrow, the day it hits lease end.
 
Chaconzies said:
So with this in mind would it be possible to renegotiate the price of the lease during the lease?

Consider that when the resale value drops below the lease's residual value the leasing company loses money. They might be willing to renegotiate, but only at a higher monthly payment so they don't lose as much. ;)

As an aside, this is why an individual should only agree to a closed end lease. With an open ended one, you're on the hook for the difference between the agreed upon residual value and resale value. A potential nasty surprise.
 
SparkEV is $26K-$7.5K-$2.5K-$1K (chevy rebate) = $15K brand new. Search for cars.com, and most are above $17K, between $14K to $22K. Used 2015 is valued at $16.5K at some web sites, more than new. But search for Leaf, and they're quite down, roughly 20% lower for 1 year old car.

So why is SparkEV not plunging in value? Too good of a car or lease not expired yet? And what will happen if Chevy discontinue SparkEV next year? Will it go up in value even more? Your guess is as bad as mine.

Oops. Above search was from about a week ago. Now there's only 2 used, and they are $17K (1LT) and $19K (2LT). Cargurus.com show $17.2K to $19.5K typical for those used cars. Question is, why would anyone buy used for more money than new? They don't have enough income for full tax credit?
 
SparkevBlogspot said:
So why is SparkEV not plunging in value? Too good of a car or lease not expired yet? And what will happen if Chevy discontinue SparkEV next year? Will it go up in value even more? Your guess is as bad as mine.

Oops. Above search was from about a week ago. Now there's only 2 used, and they are $17K (1LT) and $19K (2LT). Cargurus.com show $17.2K to $19.5K typical for those used cars. Question is, why would anyone buy used for more money than new? They don't have enough income for full tax credit?

The Federal Tax Credit only applies to the purchase (not lease) of a NEW EV and it is a credit to your federal income tax only in the amount of what you might owe up to the value of the credit. In other words, if you owe Uncle Sam $5000 before applying the credit, your EV tax credit is only worth $5000. I have been told the remaining credit cannot be rolled over to the next year so Uncle Sam gets to keep the remaining $2500.

I believe the horrible price drop on the Nissan Leaf is due to (1) a large number coming off of lease and no buyers and (2) concerns about battery degradation / reduced range reported for earlier Leafs. Also, Nissan has produced many more Leafs than Chevy has Spark EVs. According to insideevs.com, for the period of 2013 - 2015, 70,079 Leafs were sold and there was a significant drop from 30,200 in 2014 to 17,269 in 2015. For the same 3-year time period there were only 4313 Spark EVs sold. Volume of 1145 in 2014 more than doubled to 2629 in 2015 and was probably driven by what I call "the free car lease".

In August 2015 I picked up a used 2014 Spark EV 2LT with no DCFC for $13,995 plus T&L. The car was factory new with only 1500 miles and it has been fantastic to drive. I also have a 2015 Spark EV 2LT with DCFC I leased in June 2015. Same experience - it is fantastic too and, with the California and San Joaquin County rebates - not tax credits - my net lease cost is only $8.00 per month - basically a free car for 36 months!
 
MrDRMorgan said:
The Federal Tax Credit only applies to the purchase (not lease) of a NEW EV
Yes, but lease residual deducts roughly the amount of tax credit. In my case, it came to bit over $7000. I joked with the dealer that they're "ripping me off".

MrDRMorgan said:
I have been told the remaining credit cannot be rolled over to the next year
True, and I think that's one of the reasons preventing poor people from buying EV. In case of SparkEV, it's cheaper than gas cars AND performs better which should be highly desirable in cities with DCFC.

MrDRMorgan said:
I believe the horrible price drop on the Nissan Leaf is due ...
Also it doesn't help that SparkEV kicks Leaf's butt in power and DCFC time, though not many seem to know. When (if?) SparkEV is discontinued next year, it will be rare even after lease turn in after 3 years. Given that no car under $20K performs like SparkEV, I really wonder how used SparkEV will be priced in the future.

MrDRMorgan said:
In August 2015 I picked up a used 2014 Spark EV 2LT with no DCFC for $13,995 plus T&L.
No DCFC is a ding, but I wonder if you can sell it now for more than what you paid for it. Prices are pretty crazy. If this keeps up, SparkEV might become investments.
 
SparkevBlogspot said:
MrDRMorgan said:
The Federal Tax Credit only applies to the purchase (not lease) of a NEW EV
Yes, but lease residual deducts roughly the amount of tax credit. In my case, it came to bit over $7000. I joked with the dealer that they're "ripping me off".

MrDRMorgan said:
I have been told the remaining credit cannot be rolled over to the next year
True, and I think that's one of the reasons preventing poor people from buying EV. In case of SparkEV, it's cheaper than gas cars AND performs better which should be highly desirable in cities with DCFC.

MrDRMorgan said:
I believe the horrible price drop on the Nissan Leaf is due ...
Also it doesn't help that SparkEV kicks Leaf's butt in power and DCFC time, though not many seem to know. When (if?) SparkEV is discontinued next year, it will be rare even after lease turn in after 3 years. Given that no car under $20K performs like SparkEV, I really wonder how used SparkEV will be priced in the future.

MrDRMorgan said:
In August 2015 I picked up a used 2014 Spark EV 2LT with no DCFC for $13,995 plus T&L.
No DCFC is a ding, but I wonder if you can sell it now for more than what you paid for it. Prices are pretty crazy. If this keeps up, SparkEV might become investments.

No DCFC is only a ding if you need a DCFC. 90% of the driving my wife and I do is in-town within 30 miles one way and 2500 miles of driving that way has proven we do not a DCFC. We do have a Bosch L2 EVSE in the garage. On the other hand, we also have a 2015 Spark EV 2LT with DCFC and we just returned from a trip to the Sacramento, CA airport which is 75 miles north of our home. Two NRG eVgo DCFC combo stations made the trip simple to do. We are now planning a trip to Monterey, CA - about 125 miles from our home - when the weather gets warmer and it quits raining. Again, NRG eVgo DCFC combo stations will make the trip work. These trips are not possible with our 2014 Spark EV.

I really enjoy driving my Spark EVs way too much to even consider selling them. If GM can make me a good offer when my lease is up, I plan to buy the car from them; or....... give it back and lease a Bolt EV if they can entice me with a good lease like I have on the 2015 Spark EV. That decision is about 2.5 years away and a lot can change by then.
 
MrDRMorgan said:
No DCFC is only a ding if you need a DCFC.
What I meant was that lack of DCFC would be a ding if you want to sell it. If you're happy with it, no ding at all.

As for Bolt, I don't know. SparkEV was better than all cars in its price range, gas or otherwise. Bolt is like the bottom compared to other $30K cars. On top of that, it takes an hour to DCFC. Longer range, sure. There are other cars of better value, unlike SparkEV that's best value. I don't think I'll trade in my SparkEV for Bolt. If others feel similar, there will be lack of used SparkEV. Then the price will be?
 
Currently planning on trading in my Spark at lease end (which isn't until end of 2018 anyway).
I'd really like that 200 mile Bolt range, it would put Portland, my most common "out of area" travel from home, within one DCFC. San Francisco would most likely be 2 DCFC and I'd be much less likely to drive that (plus there is NO parking where I visit and after I pay the nightly car park fees, it is cheaper to fly and then take transit while there).

On the other hand, the Spark could be so attractively priced when the lease ends that I might stick with it, IF prices have come down as much as other used EV prices drop. I don't find the Spark a comfortable highway car and the Bolt would have to be a much better highway ride before I'd consider it. It also depends on what degradation the Spark battery pack sees in 3 years. I am averaging about 4.8-5.0 m/kWh. If that dropped below 4 in summer, then my experiment with a PEV has come to an end and I'd switch to a PHEV.
 
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