There's An Electric Shock In Used Car Prices Which Could Get Buyers A Bargain
It seems the mad rush for EVs — which induced a supply crisis and jacked up their asking price to a record high — has finally subsided. According to an analysis by iSeeCars, the pace at which used electric cars are being sold is slower than combustion-based and hybrid vehicles, and so is their sticker price.
The iSeeCars report took a look at over 2.3 million new and used cars (1-5 years old) to check out the EV market compared to others. Their analysts assessed EVs, hybrids, and regular fuel cars, and noticed that the demand for EVs isn't as strong. The cost of a used electric car has come down by a margin of 33.7%, which is over six times higher than the nearly 5% deprecation in the price of an average four-wheeler.
Compared to October last year, when a used EV car went for an average ask of $52,821, the price has since plummeted by a healthy 60% compared to ICE engine and hybrid rides, down to $34,994 on average in 2023. "Used car prices started to contract about midway through 2022," iSeeCars executive analyst Karl Brauer said, adding that electric car prices have come down by a one-third gross margin.
What's even more intriguing is that despite the used EV price taking a sustained nosedive, they are selling at a slower rate compared to hybrid and gasoline-fueled cars, a sign that the segment has hit a demand threshold.
The best time to buy a used electric car?
According to iSeeCars' analysis, the average EV now sells in 52.4 days, compared to 49.2 days for other cars. Last year, EVs sold in 37.5 days, showing a notable decline in used EV demand. It is, therefore, no surprise three out of 10 slowest-selling models on the market are electric cars; a list that includes the Kia EV6, Ford F-150 Lightning, and the Polestar 2. On the other hand, three hybrids — one each from BMW, Hyundai, and Toyota — are among the fastest-selling used cars on the market.
When it comes to EVs, Tesla's Model Y, Model 3, and Model S are among the fastest-selling used electric vehicles. At the same time, the Model 3, Model X, and Model S find a place in the top five list of the electric cars witnessing the biggest price drops.
It's quite a dramatic market shift to see Tesla cars in such a position, because not too long ago, old Tesla cars were being flipped for a price higher than that of a new unit. The average deprecation in the price of the entry-level Model 3 stands at 30.5 percent, bringing the price close to $33,500.
According to Brauer, most consumers are still not well-versed in electric car technology. This unfamiliarity being paired with the generally higher prices of EVs is reducing demand, slowing down sales compared to average new gasoline or hybrid vehicles. That said, out of the top 10 quickest-selling new cars, seven are notably hybrids.