Used EVs: Bargain basement transportation
Looking for a low-priced, reliable, three-year-old used car for that new driver in the family? A used EV could be the answer. With some used EVs listing as low as $4,750, add some give-and-take negotiation, the selling price for an attractive EV might be in the neighborhood of $3,700, maybe even lower.
“I don’t think consumers realize the market for used EVs is so low,” said Tim Fleming, manager, residuals and industry forecasting at Kelley Blue Book.
EVs that carried sticker prices in the $24,000 to $33,000 range back in the 2014 model year have taken a beating in the used car market, as well as EVs in other model years. For example, Autotrader listed a dealer in Castro Valley, Calif., with seven 2014 Smart Fourtwo electric models, ranging in price from $4,750 to $5,950. The lowest model had 4,007 miles, the highest, 27,410. The sticker price for the EV when new was $27,250.
Perfect for teenagers
“I'm been telling people that used EVs make for great cars, especially for teenagers,” said Dave Sullivan, manager, product analysis at AutoPacific. Sullivan cites several reasons why a family should consider scouting the used EV market for a second or third car.
“First, no maintenance is required, well almost. That makes it a good buy as a used car and also reduces costs for a kid. Second, there’s no gas. Gasoline money becomes a thing of the past. Third, they can't easily run away due to the range,” Sullivan said.
Electric motors require no oil changes, tune-up items like air filters and spark plugs or engine/transmission coolant flushes or replenishment. The only maintenance items would be to replace wear items like windshield wipers or brakes (the latter which last much longer than a conventional car thanks to regenerative braking).
But above all, Sullivan cites another reason: “The [resale] value is so poor that you can't help but look.”For example, a 2014 Fiat 500e carried a $32,600 sticker price when new. Today, that car has an average auction value of $6,003 and an average listing value of $8,767, according to Kelley Blue Book data. The 500e has a range of 87 miles, according to the government website.
There’s several other used EVs with affordable prices:
· 2014 Mitsubishi i-MiEV, sticker price, $23,845; average auction value, $5,397; average listing price, $8,347; range, 62 miles.
· 2014 Chevrolet Spark, sticker price, $28,468; average auction value, $6,158; average listing value, $9,208; range, 82 miles.
· 2014 Nissan Leaf, sticker price, $32,850; average auction value, $8,127; average listing value, $11,068; range, 84 miles.
· 2014 Ford Focus, sticker price, $39,995; average auction value, $8,572; average listing value, $11,739; range, 76 miles.
As for more premium used EVs, the prices also are attractive:
· 2014 Toyota RAV4, sticker price, $50,660; average auction value, $13,500; average listing value, $16,700; range, 103 miles.
· 2014 BMW i3, sticker price, $44,575; average auction value, $14,375; average listing value, $18,825, range, 81 miles.
· 2014 Mercedes-Benz B Class, sticker price, $43,805; average auction value, $15,316; average listing value, $19,766; range, 87 miles.
However, the 2014 Tesla S EV is in a league of its own, don’t look for a bargain here. While the Mercedes-Benz B class EV retains about 35 percent of its value (sticker price vs. average auction value), the Tesla model equipped with an 85-kilowatt hour battery pack retains 62 percent. The Tesla’s sticker price for the 2014 model year was $89,345; average auction value is $54,667, and the average listing value is $61,516. The car has a range of 265 miles.
Of course, prices will vary depending on vehicle mileage and condition. Battery range will depend on a number of factors including whether the vehicle is rolling on a flat or hilly/ mountainous surface; constant, hard acceleration; outside temperature and other variables. Battery efficiency is reduced by extreme heat or extreme cold. For example, a Carnegie Mellon study released in 2015 showed that the range of a Nissan Leaf dropped from 75 miles to just 45 miles on the hottest and coldest days of the year.
Then there is an additional cost to consider: Whether a Level 2 240-volt charger should be purchased and installed in the family garage at a cost of $1,000 to $2,000. The amount time of it takes to recharge depends on the brand and model. For example, plugging into a standard 110 volt outlet in the family garage might take up to 18 hours to recharge some battery packs. The Level 2 charging unit would likely be able to chop the charging time to about six hours.
So why have nearly all used EV prices have taken a beating?
“You have to keep in mind there are tax credits, state and federal, potentially on these (new) vehicles that effectively lower that MSRP that are contributing to it. There also are retail and dealer rebates,” Fleming said.
Then there is the popularity issue. “There is very low acceptance, very low demand in the secondary market for EVs,” Fleming said. The resale value is far lower than automakers, their financial arms and analysts predicted when the cars were new.
Low lease rates
Then there’s one final factor: Some automakers introduced bare bones lease deals that dragged down the value of used EVs. As a result, Fleming advises that before running out and buying a used EV checking out the lease deals on new 2017 models. The overall cost could be nearly the same or slightly more than buying a used EV. Additionally, if the family decides that an EV does not fit their lifestyle, the family can walk away from the vehicle once the lease ends.
Chrysler Capital, Fiat Chrysler’s preferred lending partner, offered a three-year, no money down lease on the Fiat 500e for $69 per month, Automotive News reported in March. To qualify for the deal the trade-in had to be a conquest vehicle (not a Fiat Chrysler model). The lease promotion was limited to Southern California and leases were limited to 10,000 miles per year.
“It’s ridiculous. If there is something like that available I think the new vehicle makes sense. So I would say, do your research on the price of a new one versus the used,” he said. “But other than that, I think a (used) EV makes a very nice second or third vehicle in a household.”
But Fleming cautioned: “Even though they present a good deal when they are used there is still room to depreciate a lot. The technology is evolving so quickly the market is still figuring itself out, especially on the used side, how much are these things worth?” In other words, view adding an EV to your household fleet as a long-term commitment.
Eye on the Leaf
Fleming said EV shoppers should keep an eye on Nissan. The redesigned 2018 Leaf EV will be unveiled Sept. 5 and will go on sale later this year or early next. He said Nissan might have an attractive, low payment lease deal to unload the 2017s.
Shoppers considering used EVs also are advised to check out the terms of an automaker’s warranty especially when it comes to the EV’s batteries. For example, the cost to replace the 24-kilowatt battery pack in an out-of-warranty Leaf is $6,499, according to Nissan Division spokesman Kyle Torrens. “There is a $1,000 credit for the required return of the customer’s old battery pack. Net cost to the consumer is $5,499 plus installation cost for the dealer.”
Finally, if the decision is made to purchase a used EV, finding the right EV could be difficult. Doing a search on line will reveal a long list of vehicles, but availability is limited by region. A larger number of EVs can be found in California, Arizona, Florida and other sunshine states. It likely will be difficult to find a wide variety in the Midwest or Northeast.