Remember back to 2020 when the used car market started booming? A confluence of factors suddenly made used cars a much hotter commodity than they once were – namely, manufacturers had to face supply chain issues, semiconductor shortages, and unmet production goals, driving the supply of available cars way down and their prices way up. Add in the growing cost of fuel, the increasing scarcity of lithium batteries, and the long wait lists for electric vehicles, and EVs have really become the hot thing.
So, some automotive devotees have turned to flipping those EVs, finding some buyers who are willing to pay exorbitant amounts of money – sometimes tens of thousands over the retail price – just to be able to buy one.
Seattle startup Recurrent, which tracks the used EV market, noted that used EVs (and not just the ones with “Tesla” on the nose) had climbed 25% in price since March 2021, with a 2021 Mustang Mach-E selling for more than 60% over its price from last year. Recurrent did also say that the used EV sales trends skew heavily toward the most recent model years available, with 2021 models making up 17.5% of inventory.
You can see examples of it yourself, like a nearly-new 2022 GMC Hummer EV on sale on Facebook for $220,000, when it had been retailing for less than half of that, at $105,000. There’s a Rivian R1T also listed on Facebook for $220,000, when its starting MSRP is $67,500.
Maybe those particularly high prices won’t have any takers, but online auction site Cars & Bids lists 14 recent sales of the R1T between mid-April and late June that range from $106,000 to $138,000.
And even though Tesla raised the price of its Model Y by 5% to $65,990, a flipper still posted a Model Y with less than 2,800 miles on Edmunds, asking for $70,995. Edmunds even called that a “good price,” at $1,739 “below market.”
If you’re wanting to hop on this Tesla flipping bandwagon, though, be aware that you may be limited in how many cars you can legally buy and resell in a year. In California, for example, to sell a car for profit you would need a vehicle dealer license, which requires taking an online course, passing a DMV-administered test, paying the requisite fees, and more. This is some states’ way of trying to protect consumers from shady sellers (and also protect auto dealers from competition).
Also, there are rumors that people are being banned from buying new Teslas because they were reselling them too quickly and too often.
Basically, do your research into any restrictions, and understand that this might be a relatively brief flash in the pan. Recurrent says prices probably won’t change much in the coming months, but if you wait too long, you risk more inventory coming in and flooding the market.
SOURCE | IMAGES: LA TIMES.