If you've lately tried to purchase a secondhand car of practically any kind, what you discovered could have surprised you. Automakers are struggling to produce new vehicles due to supply chain problems and a lack of components, which has resulted in a shortage of inventory and a price increase. Demand was thus transferred to the secondhand market, where prices have been steadily rising for months. According to new research, used car costs are still high but are beginning to trend downward. Even Nevertheless, the cost of used electric vehicles rose sharply in July, rising by almost 55% compared to the same month last year.
For the first three months of the year, price rises had eased, and they had continued for gas cars through June. Due to Russia's invasion of Ukraine and the ensuing increases in gas prices, used EV prices began to significantly outperform their gasoline counterparts in April. The biggest notable price increase over 2021 was for the Nissan Leaf, which saw a 45% jump to an average used price of $28,787. Next in line, with a price increase of 29.3% for the Chevy Bolt, and a 27.5% hike for the Tesla Model S. Several Tesla models experienced huge price rises the previous year, according to iSeeCars, which may be the reason why some didn't spike as sharply this time around. For instance, the Model Y "only" rose by 13.6%.
You might be asking how EV costs as a whole rose 54% even while no specific model's price climbed by that much. It turns out that between July 2022 and July 2021, a different mix of vehicles was sold, which was influenced in part by the extensive recall of Chevy Bolt batteries. Researchers found that the average price in July 2022 was pushed upward because there were significantly fewer Chevy Bolt EVs and more Tesla Model 3s and Model Ys (and to a lesser extent Model S, Porsche Taycan, and Audi E-Trons) on the market in July 2022. "Chevy Bolt made up a larger share of what was available in the used EV market last year and a smaller share this year, whereas more expensive EVs made up a bigger share this year, so the overall average price went up by a lot." Early this year, hybrid vehicle sales slowed, but they recovered in July. According to research, the decline in sales of conventional cars and the sharp rise in EV pricing are both contributing factors to the resurgence. A quick-refilling gasoline engine's improved security and gas price fluctuations might have also been factors.
Why the cost of used EVs will only keep rising as high gas prices and shortages spike demand
According to AAA, the price of gas has increased by more than 60% in the last year, making electric vehicles increasingly appear to be the more affordable choice. But anyone wanting to lower the EV market's typically high entrance hurdle will find that buying secondhand no longer provides the savings it once did. It might be difficult to discover used electric vehicles for sale, even though automakers are releasing more EVs to the market and batteries can last for many years thanks to significant technological advancements. That's partly because the same global chip shortages that cut off the supply of brand-new gas-powered cars also drove more consumers to the used car market. However, it's also a result of greater interest as more individuals seek to cut back on growing gasoline prices and greenhouse gas emissions.
Research reveals that, despite an increase in used EV purchases (whether eagerly or not), consumers continue to be concerned that the battery won't maintain its charge over time. The battery life of an automobile can be improved or decreased depending on how the owner parks, charges, and drives the vehicle. Federal laws, however, mandate that warranties for batteries sold in the United States must last at least eight years or 100,000 miles.
Even while an electric vehicle normally costs more upfront than a gas-powered equivalent, owning one can be significantly less expensive. According to research, the operating and maintenance costs of an electric vehicle are roughly 50% lower, which can result in annual savings for drivers of thousands of dollars. And there are ways to reduce that initial expense. The federal tax credit can save a consumer up to $7,500 if they can secure a brand-new automobile. Used EVs are not eligible for the credit, but many state and local tax credit schemes are.
What else to consider when buying a used EV
Even though many individuals looking at used EVs will already have a general concept of what they want in a car, there are a few unique things to take into account before shelling out a premium for one. Consider the age of the car you wish to buy carefully. Because previous EVs didn't come with the battery range that today's models often offer, it is more likely that the battery has deteriorated the older the vehicle is. The 2019 Nissan Leaf, for instance, started with a range of 150 miles, but the 2015 Nissan Leaf only got 84 miles per charge at the time. In addition, the warranty will probably be null and void if the vehicle has more than 100,000 miles on it or is more than eight years old. In the odd event that the battery does fail or another significant problem arises, the cost of repair or replacement may be too high and range up to $20,000 depending on the vehicle.
To save money on power, consumers might think about installing an at-home charger. Although the initial cost of a charger can vary, there are many level 1 and level 2 charger options available for less than $1,000. The price may need to include installation and licenses. It's crucial to know the recommended voltage and amperage for the particular car as well as what the electrical panel in your house can manage.