AUTO

Used EV Car Prices Dropping Fast, Range Score Valuable for Buyers

May 1, 2024

New EV sales growth has dropped, while used EV sales growth has increased 100% from 2022 and 40% from 2023.
Recurrent’s Price Index, which tracks the prices of popular EV models, settled at $23,787 this month.
Recurrent offers a valuable Range Score, which MotorTrend called a “CarFax” for used EV batteries, predicting remaining battery range life.

A 100% increase in used EV sales volume from 2022, a 40% increase from 2023, and a steady drop in used EV prices were reported by Recurrent. While new EV sales are slowing, used EV sales are growing fast.

Kelley Blue Book said in the first quarter of 2024, new EV sales growth in the U.S. has continued to slow, according to sales data from Cox Automotive. The share for EVs in total new-vehicle sales in Q1 was 7.3%, a decrease from Q4 of 2023.

“Electric vehicle sales in the U.S. declined during Q1 2024 — the first quarter-over-quarter downturn since Q2 2020,” said Stephanie Valdez Streaty, director of Industry Insights at Cox Automotive.

EV Adoption Barriers Drive Used EV Prices Down

The many barriers facing EV adopters, causing concern for buyers, are driving used EV prices down. Charging can be scarce in many parts of the U.S. Charging payments are frequently cumbersome, and many chargers are out of service, as frustrated EV drivers are finding.

Other barriers include high new EV prices and a small variety of new models, causing a huge segment of drivers to postpone going electric, mainly full electric with a battery electric vehicle (BEV). Many drivers, especially those in areas where public charging is scarce, are choosing hybrid electric vehicles (HEVs) and plug-in hybrid electric vehicles (PHEVs) instead of BEVs.

PHEVs are recommended over HEVs, as PHEVs are more eco-friendly and offer better cost savings.

Tesla’s Price Cuts Creates Low Used EV Prices

Tesla has cut new EV prices many times due to high EV inventory and other reasons. Most recently, Reuters reported that Tesla cut the U.S. prices of its Model Y, Model X, and Model S by $2,000 each in April 2024. Because Tesla dominates the U.S. EV market, this drives all used EV prices down.

Recurrent’s Used EV Price Index Settled at $23,787

As of April 2024, used EV prices have dropped even more since we reported on low used EV prices in January, creating screaming deals for used EV shoppers. The Recurrent Price Index tracks the prices of popular EV models, and it settled at $23,787 this month, noting a decline of 27% year-over-year.

In a Q2 2024 Recurrent report, 55% of all EVs listed for sale in the U.S. cost less than $30,000. The report also found that 30% of all used EVs cost less than $25,000, a figure that has held steady for several months, making these vehicles eligible for the $4,000 used EV federal tax credit.

High New EV Prices vs. Low Used EV Prices Are Causing Many to Consider Used vs. New EVs

High EV prices have prevented many buyers from switching from internal combustion engine (ICE) vehicles to electric. The economy market for EVs has been noticeably missing from the beginning.

Jimmy Douglas, Founder & CEO of EV auction wholesaler Plug, said: “A used Model 3 that is totally accessible to the masses and will result in so many people behind the wheel of an EV every day that otherwise would have been priced out of that reality. With a very affordable and amazing product, coupled with Inflation Reduction Act money on the hood, the pool of dealers who specialize in used EVs is finally starting to grow.”

KBB reported the top cheapest ICE cars for 2024, with the 2024 Nissan Versa No. 1 at $16,390, and the cheapest electric cars for 2024, with the 2024 MINI Hardtop at the No. 1 position at $26,795.

Tesla is addressing the lack of low-priced EV models. In April 2024, CEO Elon Musk said that Tesla plans to start production of new affordable models in “early 2025 if not late this year.” Tesla’s new affordable models are sorely needed and are expected to sell in large numbers, injecting new life into the EV revolution and making affordable EVs available to a vastly larger number of drivers.

The differences between high new EV prices and low used EV prices have convinced many drivers who were formerly thinking only of buying new vehicles to go the used route. It makes good sense, considering the high prices of new EVs, compared with the used EV prices, which have been falling steadily, as Recurrent’s used EV sales reports show with these year-over-year decreases for Tesla models over two years old:

Model 3: 27%
Model Y: 31%
Model S: 32%

Recurrent’s Range Score

MotorTrend reported on Recurrent’s Range Score, which is based on millions of miles of real-world EV usage data. Driving across varying climates helps artificial intelligence predict remaining range life of used EV batteries in the Recurrent battery reports, helpful for car buyers and sellers alike.

A 3-Year-Old Used EV Is Perfect, According to The Car Dealership Guy

Three years is considered a “sweet spot” among used electric cars, including used Teslas, according to well-known influencer the Car Dealership Guy, aka Yossi Levi. A best-value EV is a three-year old EV, according to Levi.

“The best bang for the buck for consumers in the market today, bar none, is the used electric vehicle,” said Yossi Levi, aka “Car Dealership Guy.” “And the best-value purchase is likely a 3-year-old EV, said Levi.

Levi’s alter ego, The Car Dealership Guy, brings transparency to the car market through a podcast, newsletter, and social media, building the premier destination for automotive insights and catering to both car consumers and car dealers.

John O’Dell, founder of TheGreenCarGuy.com, offers great advice for EV buyers, whether new or used, in his article “Your Ultimate Guide to Buying an Electric Car.“

Consider Leasing a New EV or Used EV

A Tesla lease, or leasing another EV such as a Ford, Chevrolet or Rivian is one attractive option for car buyers. A solution for those worried about a low resale value after buying an EV is to lease instead of buy. It’s also a great way to try before buying for first-time EV buyers.