Degradation of batteries is one of the reasons for the rapid decline in electric car prices. This makes the operation of electric cars less attractive, as the price gap between gasoline and electric cars increases over time.
Last year, prices for used electric cars were on average 25% higher. Now they have fallen by 8%.
In the US, the average used car deal price remains significantly higher than before the COVID-19 pandemic. However, not all vehicles retain their value equally. According to new research from iSeeCarsthe price gap between used gasoline and electric cars is growing.
In May 2024, the average price difference between used electric cars and gasoline cars reached 8.5% or $2,657. The average price of a used electric car last month was $28,767, while the average price of a gasoline car was $31,424.
That's a significant drop from last year, when used EVs were 25% more expensive in June 2023, or $8,000 more on average, than their gasoline-powered counterparts. At the time, the average electric car cost $40,783, while gasoline cars cost $33,469. According to iSeeCars, EV prices fell steadily until the middle of last year, leveling off in the last few months of 2023 before starting to fall again in February.
The average price of used gasoline cars did not suffer such a fate. They've held around $31,000 for the year, no more than 7% change from last year, and have actually increased by about $375 between February and May 2024.
This trend is also reflected in the price difference between the Tesla Model 3 and the BMW 3 Series. Last June, a used Model 3 cost $2,635 more than a used 3 Series. Eleven months later, Tesla's price is $4,806 lower than BMW's. The study also found that electric vehicles are among the top seven used cars that have seen the biggest price drop over the past year.
There are many threats surrounding electric vehicles right now. Sales are slowing, prices are falling, and competition is rising around the world as automakers struggle to turn technology into profitable products that meet people's needs.
Low resale value could negatively impact EV adoption as consumers continue to evaluate whether these vehicles fit their lifestyles. A car is often a person's second largest purchase after real estate, and most are unwilling to take the risk of purchasing an EV that may not be feasible.
The iSeeCars study analyzed more than 2.2 million used cars between one and five years old sold between May 2023 and May 2024.
Contents
The Used Electric Car Advantage: Why They’re Beating Gas Guzzlers at Their Own Game
The electric car market is exploding, and it’s not just because of new models hitting the road. There’s a secret weapon in the EV game, and it’s making a huge splash in the used car market: used electric cars are dropping in price much faster than their gasoline counterparts. This means you can snag a sweet deal on an electric car without breaking the bank.
The Reason for the Rapid Depreciation
Why are used electric cars losing value so quickly? It’s a combination of factors:
- The Technology is Rapidly Evolving: Just like your smartphone, electric cars are constantly getting updates and improvements. That means older models can feel outdated, especially when it comes to range and tech features.
- New Cars Are More Affordable: The price of new EVs has been steadily decreasing, thanks to increased production and government incentives. This makes new electric cars a more appealing option for many buyers.
- Limited Availability of Used Parts: The electric car market is still relatively new, which means there’s a limited supply of used parts. This can lead to higher repair costs for older EVs.
It’s a Win-Win for Buyers
But don’t be scared off! The rapid depreciation of used electric cars is actually a huge advantage for savvy buyers. Here’s why:
- Lower Entry Price: You can get into the EV game for a significantly lower cost than buying a brand-new car.
- Access to Newer Technology: Even though used EVs are depreciating quickly, they still offer impressive technology compared to older gasoline cars.
- Environmentally Friendly Choice: You’re still driving a car that produces zero emissions, helping to reduce your carbon footprint!
FAQs
Q: Should I be worried about battery life in a used electric car?
A: Battery degradation is a concern with any electric car, especially as it ages. However, newer EVs have batteries with longer warranties, and there are ways to monitor battery health.
Q: Are used electric cars reliable?
A: Electric car engines are simpler than gasoline engines, making them less prone to mechanical issues. However, it’s always crucial to buy from a reputable dealer or seller to ensure you’re getting a well-maintained car.
Q: What about charging infrastructure?
A: The charging infrastructure is expanding rapidly, making it easier than ever to find charging stations. You can also charge your EV at home with a Level 2 charger.
The Bottom Line
The used electric car market is a treasure trove of hidden gems waiting to be discovered. With the right research and a little bit of luck, you can drive away in a sleek, eco-friendly EV without emptying your wallet. It’s a win for the planet, for your wallet, and most importantly, for you!